Overseas demand dropped during every month of 2012 as conditions within the eurozone, the UK’s main export partner, tumbled.
The sector contracted during the final three months of the year following temporary growth of 0.7% in the third quarter, which took the UK out of recession on paper, according to the Purchasing Manager’s Index measuring output and orders on a monthly basis.
However, with just one quarter of growth during 2012 and weary that another quarterly decline could lead to an unprecedented triple-dip recession, Rob Dobson, senior economist at survey compilers Markit, stated that “Business confidence could easily be derailed by setbacks in key export markets.”
With Mr Dobson warning of a resurgence of the eurozone crisis, has the UK done enough to cosy up to growing economies in Asia and South America, and have businesses sold their products with the sort of pizzazz that earned one pound fish man a number 26 spot in the UK singles chart?
It certainly hasn’t made up for the fall in the eurozone market despite the Olympic torch shining on the UK.
“We’ve seen demand from China and America lift in the last three months of 2012 but they represent a small proportion of the UK’s total exports. The economy will be subdued until the eurozone recovers,” said Chris Williamson, chief economist at Markit.
However, this doesn’t look like happening anytime soon with Williamson noting that “It isn’t just Italy, Spain and Portugal [that are experiencing economic problems]. The French economy is shrinking and Germany is still struggling.”
The manufacturing sector rallied to a 20-month high acceleration in growth today, with the higher output mainly reflecting improved demand from the domestic market.
The amount of new work increased for the second month in a row, despite the level of new export orders sliding once again.
The sharpest gains were reported by consumer and companies making high-value products to be used on finished goods, such as engine manufacturers, steel producers and paint makers.
Perhaps if more goods sold in Britain were made in the UK, the economy would look a lot brighter.
We are a nation of shoppers. The Government could do worse than spend the same amount of money telling our own country about British made goods as it does to other countries through UK Trade and Investment.