Strong sterling still a big bugbear

The strong pound continues to be enemy number one for UK manufacturing, according to two sector surveys published this week. While manufacturing output continues to rise, the CBI’s four-monthly Regional Trends and the monthly Chartered Institute of Purchasing and Supply’s Purchasing Managers’ Index blamed strong sterling for poor orders and layoffs. The CBI survey, produced […]

The strong pound continues to be enemy number one for UK manufacturing, according to two sector surveys published this week.

While manufacturing output continues to rise, the CBI’s four-monthly Regional Trends and the monthly Chartered Institute of Purchasing and Supply’s Purchasing Managers’ Index blamed strong sterling for poor orders and layoffs.

The CBI survey, produced with consultant Business Strategies, found that orders dropped or remained static over the four months to July in five of the 11 regions: Wales (-18%), West Midlands (-9%), South West (-8%), North West (flat) and Yorkshire and Humberside (flat).

Exceptions to the trend were the North (up 17%), Northern Ireland (up 17%) and Scotland (up 12%), but a nationwide fall in exports was detected.

The CBI and CIPS noted many companies beginning to release employees, blaming the export problem.

However, the CIPS said that manufacturing expansion continues, with the Purchasing Managers’ Index standing at 53.4 relative to a ‘no change’ 50.0 level, but slightly down on June’s 53.5.

The bright side remains that the strong pound is reducing the cost of imported raw materials.

The PMI’s input index fell to 47.1 from 51.7.

* Bonds Foundry in Tow Law, County Durham, made 50 workers – a fifth of its workforce – redundant last week following a decline in orders for its castings for oil and gas installations.