Tough times

UK manufacturers are facing their toughest trading conditions for 20 years, according to EEF’s recent fourth quarter trends survey.

Forecasts for the coming year predict a five per cent drop in manufacturing.

EEF warned that companies will have to prepare for a sustained downturn in 2009 and urged the Bank of England to make a further full-point cut to interest rates.

Steve Radley, chief economist at EEF, said: ‘Manufacturers have made substantial progress in recent years in improving their performance but the next 12 months are set to be some of the most difficult in two decades.

'What marks this downturn out from others is the alarming rate at which conditions have deteriorated through the autumn due to the problems in the financial markets.

'It is now imperative that the government and the Bank of England continue to pull on every lever at their disposal.’

All nine regions of the UK reported a slowdown in orders, with only one region, the south-west, posting a positive output balance.