UK factories have been recording the lowest exports since almost two years ago in January of 2010 and it is attributed largely to the debt crisis in the eurozone. In a monthly report released by the CBI, as many as 44% of UK factories reported that their exports were below average for this time of year.
According to the health check report which is released on a monthly basis, there were only 12 percent of factories reporting above normal books and the end result was that exports are down 32 points in November. This is the lowest average in two years.
The chief economic adviser for the CBI, Ian McCafferty, states that the UK manufacturing sector is going through a difficult phase and that demand for products in the UK as well as abroad are ‘subdued.’ It is felt that the weakness of the sector at the moment is the direct result of what is happening in the eurozone which is the largest export market for the UK.
Looking at the total performance of firms in the UK, 41percent reported that their books were down whilst 18% said their books were above average. This results in a total downturn of 23 points, again the lowest since 2010 in October. Because of weaker books, manufacturing output is down and this is for the third month in a row.
When polled, a greater number of manufacturers felt that this trend would continue as 32 percent believe that the UK will continue experiencing weaker exports and books whilst 24 percent feel that production may increase over the coming quarter.
CBI feels that a resolution to the ongoing financial problems in the eurozone would quickly resolve the problem which has been negatively impacting the UK both in exports and in total output. Once those problems are resolved the CBI feels that consumer confidence will grow here at home.