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Business Finances Threatened as Manufacturing Slumps

Factory output dropped 1.4 percent in April compared to March, indicating the economy got off to a bad start to the second quarter of the year.

A range of factors, from bad weather to political uncertainty have led to a weakened foreign and domestic demand. This has been seen across a swathe of industries, from construction to the automotive. Factory workers have struggled to get back on their feet following such economic setbacks and output has suffered as a result.

According to new data from the Office for National Statistics, British factories saw the biggest monthly drop in manufacturing output since 2012, with exports of goods and services falling and an unimpressive 0.5 percent rebound in growth.

Business confidence has been knocked, and workers are struggling to improve their performance and enthusiasm at the workplace. Employers can do their part of course, and investing in new technology and equipment can quickly boost the productivity of workers. At the Credit Protection Association, our debt recovery services free up cash flow and provide our Members with the financial power to explore new ways to shape their workspace for the better.

GDP grew by just 0.2 percent in the three months to May, the National Institute for Economics and Social Research (NIESR) estimated, barely recovering from the slump to growth of 0.1 percent in the first three months of the year.

“One reason for sluggish growth is the disruption caused by severe weather in March, particularly to the construction sector. The latest data also shows a notable slowdown in manufacturing sector output that appears to be driven by both domestic and external conditions,” said Amit Kara of NIESR.

“By contrast, the retail sector and the dominant services sector may be recovering. Looking ahead, we expect the economy to strengthen from here mainly because monetary policy in the UK and elsewhere continues to remain accommodative.”

However, Brexit negotiations, global trade tensions and political risks in the eurozone could all pose risks to that outlook.

There were some glimmers of light among the bad news.

New housing orders jumped by 15.2 percent to £4.6 billion in the first quarter of the year, the highest level since early 2007, indicating the residential market has some underlying strength.

Private industrial construction orders jumped by more than 60pc on the quarter, though infrastructure orders tumbled.

“While there was also a slight monthly pick-up in construction output, the longer-term trends confirm continued weakness, and together with the widening in the UK’s trade deficit and weakening industrial output, point to a bleak start to the second quarter,” said Suren Thiru, head of economics at the British Chambers of Commerce.

As Britain edges closer to the Brexit deadline next year, its import and exports become increasingly more important. Promoting a strong image to rival economies will help trade relationships after we officially depart from the European Union.

Many of our sectors, from manufacturing to services, to retail, are all exposing vulnerability, as they suffer from low profits and even lower morale. This dip in confidence can be overturned by the employers, who can reshape the workplace through a heavier scrutiny of cash flow.

At the Credit Protection Association, we have helped many of our Members navigate the ever-muddy waters of Brexit uncertainty. While the resulting blow to business confidence brought many industries to a standstill, our debt recovery services have slowly brought many back to life.

Chasing down unpaid invoices and late payers have freed up our Members’ cash flow and allowed many to invest in new equipment, technology and training schemes. This has helped boost productivity, worth ethic and the general morale within the workplace. Focussing on new technology and new training schemes, in particular, allow employees to see the bigger picture, and how improving their output can enhance the overall competitive power of the UK.