UK (Commonwealth Union)_ On Thursday, the British Manufacturers Association revised downward its prediction for increase in manufacturing production in 2019, citing significant demand and energy price uncertainties.
A large amount of uncertainty over demand and energy costs led the British Manufacturers Association to cut its prediction for increase in manufacturing output for the upcoming year. In contrast to the 1.7% prediction made in June, Make UK has revised its projection for manufacturing growth to just 0.6% for 2019. Consumer demand has been weakened and corporate running costs have increased as a result of the rising cost of energy brought on by Russia’s on-going invasion of Ukraine.
According to Stephen Phipson, chief executive of Make UK, “eyewatering prices and a very harsh international climate… (threaten) to shatter expectations of a prolonged recovery from the epidemic and put many perfectly viable firms at jeopardy.” A poll of UK manufacturers conducted by Make UK and BDO accountants found no evidence that the weak pound, which this week hit its lowest level versus the US dollar since 1985, will increase exports.
The high value-added nature of UK manufacturing means that many firms sit in the middle of global supply chains and are less well-positioned to take advantage of relative devaluations in sterling, according to Make UK. This is one reason why UK manufacturers have not been able to sell their products abroad more easily.
Before Liz Truss was appointed Prime Minister and unveiled intentions to assist people and companies over the upcoming months. The government announced on Wednesday that it would cap wholesale electricity and gas prices for businesses at less than half the market rate beginning the following month. This move will help ease the pressure from rising energy prices but will also add to the government’s rapidly increasing spending.
