Manufacturing output across the
The survey shows that, across three northern English regions and in
Differences between the north and the south were even more telling for orders. At a national level, the volume of new orders fell, contrary to expectations based on better prospects in the Eurozone and hopes for more sustained growth in domestic demand. The South West bore the biggest brunt of the decline but volumes of orders also fell in
Looking forward, expectations for export orders are most positive in the north, especially the North East, compared to predictions of little change or marked decline in the south, most notably the South West.
These trends translate into deteriorating business sentiment for many regions. The sharpest decline in optimism was seen in the South West, followed by
In all regions, apart from the East Midlands, the number of firms working below capacity rose, with
Rising costs, associated with higher energy prices, continued to add to pressure on firms’ profit margins, as they have done for the past two years. Costs rose most steeply in
The divergence between the north and south is also seen in employment. With the number of manufacturing jobs in long-term decline, it is unusual for regions to see expansion in employment. However, an increase in jobs was seen in both the
The overall decline is set to continue. According to estimates based on the survey results, the biggest fall in jobs in absolute terms in the next three months is expected in the South East & London (9,000), which also has the largest percentage decline of 1.6%.
The survey shows that in the past three months, output from capital goods industries has expanded, whereas production in the rest of manufacturing has slipped from the upturn seen earlier in the year. More specifically, areas of strength in the north, such as machinery, industrial plant, machine tools and shipbuilding, have shown sufficient strength to outweigh a continued decline in textiles. Performance in the south has been dragged down by exposure to industries that have done less well, such as paper, printing & publishing and furniture, and in the South West a decline in chemicals & man-made fibres.
Peter Gutmann, Economist at Experian, said: ‘Manufacturers are far from convinced that the better growth they saw earlier in the year has become something more sustainable. The upbeat expectations for export orders in the north is encouraging. But not all regions are feeling the benefit of better growth in the Eurozone and serious question marks about the US economy mean exports cannot be relied upon to drive a lasting recovery.’
Doug Godden, CBI Head of Economic Analysis, added: ‘