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UK manufacturers expect output to fall 3.2% in 2023
Global Banking & Finance Review®
Company
By David Milliken
LONDON (Reuters) – British manufacturers expect output to fall by 3.2% next year after a 4.4% decline in 2022, as they are hit by rising raw material prices and borrowing costs and a slide in consumer demand, a trade body said on Monday.
“There is simply no sugar-coating the outlook for next year and possibly beyond,” said Stephen Phipson, chief executive of Make UK. “These are remarkably challenging times which are testing even the best and most successful of companies to the limit.”
Make UK welcomed recent government support, which includes 18 billion pounds ($22 billion) of energy bill subsidies for businesses across the economy as a whole, but warned that more may be needed soon. The energy subsidies stop at the end of March.
“The bigger issue is that the UK risks sleepwalking into an acceptance that little or no growth is the norm. Government needs to work with industry as a matter of urgency to deliver a long-term industrial strategy,” Phipson said.
The trade body said it wanted a temporary relaxation of immigration controls, lower property taxes and greater tax incentives for training and investment.
Make UK, which says it represents 20,000 companies ranging in size from start-ups to multinationals, forecasts the broader economy will shrink 0.9% next year, less than the 1.4% decline forecast by the government’s Office for Budget Responsibility last month.
The most recent official data shows that manufacturing output in September was 5.8% lower than a year earlier.
Make UK said the scale of the fall in output that it was estimating for 2022 partly reflected an unusually strong performance in 2021, when there was a bounce back in demand after the pandemic.
($1 = 0.8148 pounds)
(Reporting by David Milliken; Editing by Alison Williams)
Manufacturing refers to the process of converting raw materials into finished goods through the use of labor, machines, tools, and chemical or biological processing.
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real GDP.
Consumer demand is the desire of consumers to purchase goods and services at given prices, which influences production and pricing decisions in the economy.
Borrowing costs refer to the interest rates and fees that borrowers must pay to lenders when they take out loans, impacting overall financial decisions and economic activity.
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