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Manufacturers at 'standstill' despite pre-Christmas boost

Sky News logo Sky News 02/12/2019 James Sillars, business reporter
a man standing in front of a store: Manufacturers are struggling globally as the US-China trade war dents demand © Reuters Manufacturers are struggling globally as the US-China trade war dents demand

UK manufacturers are now at a "standstill", according to a report by an industry body pointing to an improvement in fortunes in the run-up to Christmas.

Make UK, formerly known as the EEF, said a survey of its members pointed to the timing of orders ahead of the festive season boosting demand towards the end of another difficult year.

The whole of 2019 has been dominated by continued Brexit uncertainty and the US-China trade war - the latter contributing to manufacturing slowdowns across the world.

Make UK released its Outlook report on the same day a separate indicator of activity showed factory output was slowing.

The IHS Markit/CIPS Purchasing Managers' Index (PMI) reported that manufacturers were cutting jobs at the fastest rate since 2012 last month - the first since the latest Brexit delay and general election were announced.

a person riding on the back of a car: Carmakers are building fewer vehicles as sales fall Europe-wide and the industry gears up for a new electric future © Sky News Screen Grab Carmakers are building fewer vehicles as sales fall Europe-wide and the industry gears up for a new electric future

"Output, new orders and employment all fell, while destocking activity resumed as firms depleted buffers built-up in advance of the postponed exit date", the report said.

The core reading for the index came in at 48.9 from 49.6 in October.

Any figure below 50 indicates contraction.

The PMI has been below 50 now for seven consecutive months.

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Make UK's chief executive, Stephen Phipson, said: "Uncertainties about the outcome of Brexit and the impending general election continue to weigh on the UK manufacturing sector but the build up to Christmas has brought a much needed boost.

"Firms are reporting weaker business activity overall, especially from the domestic UK market but export orders have increased slightly this quarter, indicating greater confidence from foreign customers about purchasing UK goods

as concerns about an end of year no-deal Brexit fade.

"Manufacturers will hope that the next 12 months will see a return to Westminster focusing on critical issues such as delivering a long term vision for the economy."

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