London: The new year has hardly started but
UK’s manufacturers are already expecting 2015 to be tough. Confidence
has tumbled as those expecting a better economy have almost halved,
while the number predicting a turn for the worse globally has soared.
UK’s manufacturers are already expecting 2015 to be tough. Confidence
has tumbled as those expecting a better economy have almost halved,
while the number predicting a turn for the worse globally has soared.
At the beginning of 2014, 70
per cent of manufacturers surveyed said they were looking forward to an
improved British economy. That number has fallen to 37 per cent amid
rising input costs and renewed fears about the health of the Eurozone, a
leading export market for Britain, according to the EEF/Aldermore
annual survey of manufacturing executives.
per cent of manufacturers surveyed said they were looking forward to an
improved British economy. That number has fallen to 37 per cent amid
rising input costs and renewed fears about the health of the Eurozone, a
leading export market for Britain, according to the EEF/Aldermore
annual survey of manufacturing executives.
Those expecting a renewed
downturn in the global economy rose from 5 per cent last year to 38 per
cent. “Concerns have really grown again about the Eurozone,” said Lee
Hopley, Engineering Employers’ Federation chief economist. “That has
measurably changed since 12 months ago.”
downturn in the global economy rose from 5 per cent last year to 38 per
cent. “Concerns have really grown again about the Eurozone,” said Lee
Hopley, Engineering Employers’ Federation chief economist. “That has
measurably changed since 12 months ago.”
The survey comes days after
Mario Draghi, ECB president, warned that the threat of deflation in the
Eurozone was rising. His comments drove the euro down last week to its
weakest against the dollar since June 2010.
More UK manufacturers caught in a pall of gloom | GulfNews.comMario Draghi, ECB president, warned that the threat of deflation in the
Eurozone was rising. His comments drove the euro down last week to its
weakest against the dollar since June 2010.
The findings will add to a growing sense of
pessimism after December’s rate of manufacturing expansion proved slower
than expected.
pessimism after December’s rate of manufacturing expansion proved slower
than expected.
Though 2014 is still set to
show the highest rate of manufacturing growth in four years, at 3.5 per
cent, the factors causing concern for 2015 are multiplying. Though
expectations are still for growth of 2 per cent, manufacturers will face
more pressures on profitability, both from non-wage costs, after
changes in legislation on holiday payments, and from higher than average
pay settlements in industry.
show the highest rate of manufacturing growth in four years, at 3.5 per
cent, the factors causing concern for 2015 are multiplying. Though
expectations are still for growth of 2 per cent, manufacturers will face
more pressures on profitability, both from non-wage costs, after
changes in legislation on holiday payments, and from higher than average
pay settlements in industry.
A net
balance of just 7 per cent of manufacturers expect higher profit margins
this year, down 30 percentage points on last year, the survey showed.
balance of just 7 per cent of manufacturers expect higher profit margins
this year, down 30 percentage points on last year, the survey showed.
With the next round of pay
negotiations due to start in the coming weeks, EEF data show that in 163
pay settlements monitored over the last six months of 2014 the average
increase was 2.5 per cent. Though this is marginally down on the 2.6 per
cent increase recorded in the first six months, the rate continues to
“outpace the growth in the broader economy,” the EEF said.
negotiations due to start in the coming weeks, EEF data show that in 163
pay settlements monitored over the last six months of 2014 the average
increase was 2.5 per cent. Though this is marginally down on the 2.6 per
cent increase recorded in the first six months, the rate continues to
“outpace the growth in the broader economy,” the EEF said.
Official data show that the
median weekly wage in manufacturing rose 1.2 per cent to 516.80 pounds
in the year to April 2014, while in the service sector the median wage
rose just 0.4 per cent to 396 pounds.
median weekly wage in manufacturing rose 1.2 per cent to 516.80 pounds
in the year to April 2014, while in the service sector the median wage
rose just 0.4 per cent to 396 pounds.
The Office for Budget
Responsibility predicts real wage growth will recover slowly to about 2
per cent a year. But that will still leave real pay lower in 2019 than
it was in 2007.
Responsibility predicts real wage growth will recover slowly to about 2
per cent a year. But that will still leave real pay lower in 2019 than
it was in 2007.
Despite the gloom about the
year ahead, many manufacturers are still planning to invest. More than a
third will fund new manufacturing capacity as they catch up on
relatively low levels of investment in the years after the financial
crisis.
year ahead, many manufacturers are still planning to invest. More than a
third will fund new manufacturing capacity as they catch up on
relatively low levels of investment in the years after the financial
crisis.
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