UK Manufacturers Need Pick-Me-Up

3rd May 2018.

Activity in the UK manufacturing sector slowed at the start of the second quarter of the year, according to the latest survey of purchasing managers working in the sector.

The first quarter of 2018 has not been kind to consumers, retailers, contractors; and now, manufacturers. Growth has been slow in most sectors during the first quarter of the year, despite the recent upturn in inflation and wage growth. According to a recent Purchasing Managers’ Index (PMI) survey, UK manufacturing growth came in at 53.9, a 17 month low. This is below expert predictions and has caused concern for the overall strength of the economy. Business and consumer confidence have also shown to be at low levels, with political uncertainty and squeezed household budgets still plaguing thoughts.

The report, compiled by IHS Markit, revealed that the growth of new export business was at its lowest, along with the sluggish pace of job creation. Manufacturing accounts for 10 percent of UK GDP so experts are concerned the overall ramifications that this slowdown could have on the economy. Businesses from within the sector should focus on boosting growth, freeing up cash flow to fund expansion opportunities.

At the Credit Protection Association, our debt recovery services chase down unpaid invoices and residual debt, restoring financial freedom to our members for new opportunities. In this muddled economic landscape, businesses need to keep Britain’s competitive edge intact by investing in the newest equipment and technology.

The report, compiled by IHS Markit, showed that business confidence among manufacturers has fallen to its weakest level in five months, with firms citing concerns about Brexit and possible future trade barriers.

The ONS estimated that the UK’s overall GDP growth slumped to 0.1 percent in the quarter, raising concerns that the economy is now virtually stagnating.

The pound, which fell sharply after last week’s GDP figures, slipped further on Tuesday as traders pulled back their bets on the Bank of England’s Monetary Policy Committee (MPC) raising interest rates at its next meeting on 10 May.

“Markit’s manufacturing survey provides more evidence that the economy has fundamentally slowed this year, strengthening the case even more for the MPC to hold back from raising interest rates later this month,” said Samuel Tombs of Pantheon.

Experts are rightly concerned for the trajectory of the economy, with skyrocketing business rates and an interest rate hike on the horizon. More than most sectors, our exit from the EU has caused much concern, with the resulting political uncertainty hitting hard on demand. To encourage domestic and international interest in our goods and services our businesses need capital, they need the funds to purchase the innovative machinery and technology that could boost productivity and sustain our competitive edge.

At the Credit Protection Association, our debt recovery services free up the necessary cash flow our members need to reignite their sectors and their personal prospects. Our credit checks and credit reports also protect our members’ interests, investigating the financial strength of their customers moving into the long-term.

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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