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UK MANUFACTURING SLUMP DEEPENS AS EXPORT ORDERS FALL

Oranjestad, August 1, 2012 - U.K. manufacturing shrank the most in more than three years in July as export orders slumped, indicating the economy’s recession continued to deepen at the start of the third quarter.

A factory-output gauge fell to 45.4 from a revised 48.4 in June, London-based Markit Economics said today. The reading was weaker than any of the 30 forecasts in a Bloomberg News survey. The decline was led by weaker demand in the euro area, where a separate index showed manufacturing shrank for a 12th month.


British manufacturers are struggling as the sovereign debt crisis deepens in Europe, the U.K.’s biggest trading partner, and global growth cools. The Bank of England, which expanded stimulus last month, will probably keep its bond-purchase targetunchanged tomorrow as policy makers assess their Funding for Lending plan aimed at stoking the flow of credit and reviving growth.

“There is a lot of ground to recover,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. “Alongside distinctly underwhelming anecdotal evidence from consumer-facing parts of the economy, this bodes ill for hopes of a rebound in third-quarter gross domestic product.”
Economists had forecast a reading of 48.4 for the factory index, based on the median estimate. A reading below 50 indicates contraction.

Read more/source: http://www.bloomberg.com./news/2012-08-01/euro-area-manufacturing-output-contracted-12th-month-in-july-1-.html

 

 

By orbitalnets.com