UK manufacturing to shrink 0.3% as eurozone crisis continues

Posted on 23 Jul 2012

UK manufacturing output will fall by 0.3%, shrinking for the first time in three years in 2012, according to figures by EEF.

The manufacturers’ organisation forecasts that the sector will record 0.2% growth this year, as the crisis in the eurozone hits UK exports and trade.

Lee Hopley, chief economist at EEF, said: “The estimate for second quarter growth is again unlikely to flatter the UK’s economic performance. But the bigger question is where we go from here. Our forecast scenarios show the importance of bringing greater confidence and certainty to the private sector. The rebalancing process would be kick-started if firms were to push ahead with investment plans.”

EEF added that if one or more countries were to leave the Euro, British GDP would drop 0.7% this year and 3.6% in 2013.

According to the organisation, the performance of UK manufacturing could improve slightly in the second part of the year.