Recent data indicates that UK manufacturers are revising their hiring intentions amidst a notable decrease in order inflow.
Based on the most recent quarterly findings from Make UK, the body representing UK manufacturers, and global business consultancy BDO, there has been a discernible contraction in manufacturing activity. This trend marks the most significant dip in factory recruitment intentions since the EU referendum in 2016, a result of reduced order volumes both domestically and internationally.
For 2023, Make UK has adjusted its growth predictions, anticipating a 0.5% contraction in output.
Verity Davidge, Make UK's policy director, commented, "A combination of escalating interest rates, rising living costs, and a deceleration in international markets is leading manufacturers into a pronounced slowdown." She further noted that companies are adopting a more conservative stance, anticipating a challenging year ahead, potentially more severe than currently estimated.
Further data from recent purchasing manager reviews suggests that the UK manufacturing sector's downturn intensified in August, with both production and order volumes declining in light of a weakening economic landscape.
A noteworthy observation from the Make UK and BDO survey was that around 75% of the interviewed firms felt that international incentives, such as the US Inflation Reduction Act, pose a challenge to justifying investments in the UK.
Additionally, Heather Boushey, a prominent figure from the White House council of economic advisers, highlighted to media outlets the imperative for countries like the UK to enhance their green investments. Such strategic investments could potentially stimulate economic growth, bolster energy security, and safeguard against unforeseen inflationary pressures in the future.