UK manufacturing suffers weakest performance in two years: report
LONDON, June 6 (Xinhua) -- Britain's manufacturing and engineering sectors suffered their weakest performance in two years in the second quarter of this year due to weak High Street spending and slow growth in the eurozone, a report released by British manufacturers' organization EEF said on Monday.

The Engineering Employers' Federation said in its second quarter engineering outlook survey that it was cutting its growth forecast for Britain's manufacturing sector to just 0.5 percent from 1.4 percent and for engineering to 1.1 percent from 2.6 percent.

The EEF said the double hit of falling consumer spending and slow growth in the eurozone is now resulting in poorer prospects, causing confidence levels of manufacturers to begin to fall away.

It said domestic orders were at their weakest level for two years with British car industry seeing a sharp decline in the second quarter of 2005.

The EEF, which has a membership of 6,000 manufacturing, engineering and technology-based businesses, said the findings were based on a survey of 1,000 firms.

"Manufacturers could only escape the double impact of a reluctant consumer and a poor eurozone for so long and we are now beginning to see the effects," said EEF chief economist Steve Radley.

"Despite a positive picture in some industries, there has been a change in sentiment across the economy which will need addressing if growth begins to stutter," he said.

The report called on the Bank of England to cut interest rates if the slowdown continued over the summer.

The Bank's Monetary Policy Committee voted in May to keep the cost of borrowing on hold at 4.75 percent for the ninth month running.


Publication date: 2005-06-06