UK manufacturers face a recession for most of this year, according to the CBI’s latest quarterly economic forecast. Manufacturing output is set to fall 3.6% during 1999, before increasing slightly in 2000.
GDP growth will almost hit zero during the first half of 1999, before picking up again to reach 1.8% in 2000.
Output prices will continue to rise more slowly than retail prices, according to the CBI, which may be one reason why profits are expected to fall by an average 0.7% in 1999, before picking up again in 2000.
Export growth looks set to decline in 1999 and pick up slowly in 2000, still behind the growth in imports.
Forecasts of a manufacturing recession last year have been borne out by the latest official output figures. These show production falling by 1.3% during the last quarter of 1998, the second successive quarterly fall.
* Aluminium products (semis) growth is slowing down in Europe, according to the European Aluminium Association. It predicts little or no growth in rolled products, but the extrusion market will benefit from a strong performance by the construction industry.