September 24, 2005 | posted by Michael Baxter in Uncategorized |

Just as it seemed like things couldn’t get any worse, they did.

At least last month, demand from abroad for our manufactured good seemed promising. But now, a month on, even that is down.

According to the CBI, September saw “a sharp drop in the demand from abroad for capital goods, such as machinery and equipment, while a weak European export market also continues to depress orders.”

Ian McCafferty, CBI Chief Economic Adviser said:

“A combination of weak consumer spending and challenging world markets is weighing on UK manufacturing, following the sector’s contraction over the first half of the year. Cost pressures from high oil and transportation prices will only serve to depress profits further.

“Although it is too early to say if this month’s decline in export demand is the start of a trend, the fall is a further blow for manufacturers at a difficult time. Firms will be hoping this is not the first sign of slow-down in the global economy in the face of the latest oil price increases.”

In all the CBI industrial trends index was -27 in September, with 39 per cent of firms reporting total order books below normal, while 12 per cent say they are above normal. The August index was the lowest since October 2003.