Fears mount over the economy as consumer confidence falls to new low
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Britain’s factories suffered the deepest slump in orders since the first Covid lockdown and are braced for worse to come as demand from customers in the UK and overseas withers. Businesses are slashing investment amid rising taxes and red tape, according to the Confederation of British Industry’s survey of the manufacturing sector.
“Manufacturers have entered the New Year in a grim mood. Confidence has evaporated over the last three months as orders have dropped,” said Ben Jones, economist at the business group. “A fall in domestic deliveries comes amid widespread concerns over the impact of the increase in National Insurance contributions, minimum wages and changes to employment law on firms’ operating costs.”.
Much of the global manufacturing sector is struggling with German industry gripped by high energy prices, weak demand and stiff competition from Chinese car manufacturers, while China itself is also battling against an economic slump caused in part by a property crisis.
As a result British factories have few orders from overseas. “Export prospects appear worse than at any time since the pandemic, reflecting a slowdown in overseas demand and reports of ongoing difficulties securing supply contracts with customers based in the EU,” said Mr Jones.
He called on the Government to inject fresh confidence into the economy. “Several firms noted concern that negative sentiment risks becoming self-fulfilling,” said Mr Jones. “The government can play a role in re-booting confidence by sending clear signals of intent on policies that could support the manufacturing sector, notably delivering an industrial strategy that helps the UK win the global race for growth, matching skills to economic needs, and accelerating our energy transition and resilience.”.
