UK manufacturing sees slowest growth in three years

Edmund Heaphy
Finance and news reporter
Workers on an engine production line in a car factory. Photo: Mahaux Charles/AGF/Universal Images Group via Getty Images

Manufacturing output in the UK ground to a halt in the past three months, with the 2% growth seen in the sector the slowest since April 2016, according to the Confederation of British Industry (CBI).

More worryingly, the total number of orders logged in manufacturing books declined to their lowest level since October 2016, a survey of 308 manufacturers revealed.

The slowdown in manufacturing output in the three months to June was primarily due to an 83% decline in motor vehicle production, the largest fall since the financial crisis, the CBI said in a statement.

“The bringing forward of planned closures to car manufacturing plants had a real impact and led to manufacturing output grinding to a halt, said Alpesh Paleja, the CBI’s principal economist.

“While the picture elsewhere in the sector was more benign, total orders weakened once again revealing some underlying causes for concern.”

Export orders, however, improved slightly in the period. Manufacturers also signalled that they expect a slight uptick in output prices in the next three months, even though they think output will also be slow in the three months to July.

Output expanded in 10 out of 17 sub-sectors, with chemicals, tobacco and food and drink industries driving growth. But it was not enough to thwart plummeting car production.

The news comes at a difficult time for the car industry in the UK.

British car production hit a five-year low in 2018, with manufacturers blaming Brexit uncertainty for a massive decrease in investment in the sector.

Earlier this month, Ford announced that it would close its Bridgend engine plant in Wales in 2020, with the potential loss of around 1,700 jobs.

This followed a similar announcement from Honda, which said in February it would close its Swindon plant in 2021.

The same month, Nissan abandoned plans to manufacture its flagship X-Trail SUV vehicle at its Sunderland plant.

And in January, Jaguar Land Rover said a substantial proportion of 4,500 worldwide job losses would come from its UK workforce.