Manufacturing Orders Decline

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UK manufacturing growth fell to its lowest rate for 21 months in June as new orders declined, the latest Markit/Cips survey says.

The groups’ manufacturing purchasing managers’ index (PMI) for June fell to 51.3, down from May’s downwardly revised measure of 52.0.

Markit senior economist Rob Dobson said that growth was ‘stalling’, with weak domestic demand and the recent boost to exports now fading.

He warned: ‘The manufacturing sector continued to slip closer to stagnation in June. The data will call into question the sector’s ability to play a major role in delivering a robust and sustainable economic recovery.’

The survey also found that the rate at which companies were hiring staff slowed, and new orders fell for the second month in a row.

Responding to the survey, Engineering Employers Federation (EEF) chief economist Lee Hopley said, despite production ‘edging up’, that ‘with spending cuts now kicking in, it is clear that any support to growth from the domestic market is likely to be minimal’.

Hopley warned that this means UK manufacturers are ‘exposed to events in the global economy where persistent weakening of activity indicators across Europe and Asia would start to ring alarm bells about the UK’s prospects’.

• The Unite union yesterday urged Business Secretary Cable, and Transport Secretary Philip Hammond, to ‘take responsibility and act now’ to save the UK’s last train manufacturer Bombardier, and 4,000 skilled jobs.

This was in response to a letter from them to prime minister Cameron saying: ‘There is a perception that other EU countries appear to manage their public procurement processes with a sharper focus on domestic supply than we have hitherto.’

Unite said: ‘The letter from the two ministers is an admission that the government has put Bombardier at grave risk but they attempt to deflect blame away from their own departments for the decision not to award Bombardier a contract to build train carriages.

‘It was Philip Hammond’s department of transport which awarded preferred bidder status to Siemens instead of Bombardier.

‘Instead, they urge the Prime Minister to examine whether Britain is making the best use of EU procurement rules.

‘A review of EU procurement rules, with a view to ensuring UK manufacturing is properly supported, would be welcome but the government needs to act urgently to save Bombardier in Derby, the UK’s last train manufacturer.

‘A long-term solution to manufacturing strategy is long overdue but in the short term the government must act now.’