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CBI warns export demand is slowing in latest sign of faltering UK recovery CBI warns export demand is slowing in latest sign of faltering UK recovery
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Falling demand for British goods abroad weighed on manufacturers in October, in the latest sign that the UK recovery is losing steam.Falling demand for British goods abroad weighed on manufacturers in October, in the latest sign that the UK recovery is losing steam.
A sluggish eurozone economy and a stronger pound pulled exports lower for the first time in 18 months, according to the CBI, frustrating government ambitions for a big push in UK exports.A sluggish eurozone economy and a stronger pound pulled exports lower for the first time in 18 months, according to the CBI, frustrating government ambitions for a big push in UK exports.
Rain Newton-Smith, director of economics at the business lobby group, said: “It’s disappointing that a sluggish exports market has taken some of the steam out of manufacturing growth, which was going from strength to strength throughout most of this year.Rain Newton-Smith, director of economics at the business lobby group, said: “It’s disappointing that a sluggish exports market has taken some of the steam out of manufacturing growth, which was going from strength to strength throughout most of this year.
“The manufacturing sector is clearly facing headwinds. Global political instability, mounting concerns about weakness in the eurozone, and recent rises in sterling are all weighing on export demand.”“The manufacturing sector is clearly facing headwinds. Global political instability, mounting concerns about weakness in the eurozone, and recent rises in sterling are all weighing on export demand.”
The balance of manufacturers reporting a fall in export orders over the past three months fell to -7% in October, the lowest since January 2013. Domestic demand for factory goods was more resilient, with a balance of +14% of firms reporting a rise in orders from within the UK over the past three months. It was, however, the slowest rate of quarterly growth since January. The balance of manufacturers reporting a fall in export orders over the past three months fell to -7% in October, the lowest since January 2013. Domestic demand for factory goods was more resilient, with a balance of +14% of firms reporting a rise in orders from within Britain over the past three months. It was, however, the slowest rate of quarterly growth since January.
Paul Hollingsworth, UK economist at Capital Economics, said the CBI’s industrial trends survey was the latest indication that the short-term outlook for UK manufacturers was gloomy.Paul Hollingsworth, UK economist at Capital Economics, said the CBI’s industrial trends survey was the latest indication that the short-term outlook for UK manufacturers was gloomy.
“The latest survey provides further evidence that the UK’s economic recovery is likely to receive little support from the manufacturing sector in the near term. Accordingly, it is up to the dominant service sector to ensure that the recovery retains its momentum.”“The latest survey provides further evidence that the UK’s economic recovery is likely to receive little support from the manufacturing sector in the near term. Accordingly, it is up to the dominant service sector to ensure that the recovery retains its momentum.”
The challenging backdrop for UK exports is a further blow to government ambitions to rebalance the economy away from consumer spending and towards manufacturing and exports.The challenging backdrop for UK exports is a further blow to government ambitions to rebalance the economy away from consumer spending and towards manufacturing and exports.
George Osborne announced an ambitious target in 2012 of doubling UK exports to £1trn in 2020. The British Chambers of Commerce has warned that the lack of progress so far suggests the chancellor will miss his target. Exports increased by 2.1% in 2013 to £505.6bn.George Osborne announced an ambitious target in 2012 of doubling UK exports to £1trn in 2020. The British Chambers of Commerce has warned that the lack of progress so far suggests the chancellor will miss his target. Exports increased by 2.1% in 2013 to £505.6bn.
The first official estimate of third-quarter growth to be published on Friday is expected to show a 0.7% increase in GDP, slower than the 0.9% growth achieved in the second quarter.The first official estimate of third-quarter growth to be published on Friday is expected to show a 0.7% increase in GDP, slower than the 0.9% growth achieved in the second quarter.