The CBI predicts over 60,000 jobs will go before the end of the year
Manufacturing confidence has dropped at its sharpest rate in nearly 30 years and more than 60,000 jobs could be slashed before the end of the year, according to the Confederation of British Industry (CBI).
Orders for UK made goods have fallen at their fastest rate since 1999, revealed the CBI survey. Much of the slump was driven by weak domestic orders but export orders also fell as the global economic slowdown suppressed demand.
Manufacturing output fell at the fastest rate in ten years with no let-up expected soon, according to the survey.
Confidence in the manufacturing sector has also plummeted as the CBI survey’s business sentiment index showed the fastest fall in confidence since July 1980, when the economy was in the depths of a recession.
“The slowdown in the UK economy is now spreading to sectors previously resilient to the weakness in the banking and housing markets.
Ian McCafferty, the CBI's chief economic adviser
The survey reveals that more difficult lending conditions following the credit squeeze are acting as a brake on manufacturers’ investment plans. Nine per cent of firms said their output was likely to be constrained by credit or finance in the coming quarter, the highest figure since 1975.
Based on the survey results, the CBI forecasts 65,000 manufacturing jobs will be lost before the end of the year.
Ian McCafferty, the CBI’s chief economic adviser, said: ‘The sharp falls in orders and output show that the slowdown in the UK economy is now spreading to sectors previously resilient to the weakness in the banking and housing markets.’
The central bank made an emergency cut in interest rates this month to shore up the economy in the face of the worst banking crisis in modern times.