Economic research firm Markit Economics has revealed that the UK manufacturing industry has failed to recover from a shockingly low Purchasing Managers Index in February. The four-month low result released last month read only 47.9, with March’s results only marginally better at 48.3.
While any sign of improvement is of course to be welcomed, the result means that the industry remains officially in contraction – a score of 50 would indicate neither growth nor contraction, with any result over this indicating much-needed growth.
The poor performance has been largely put down to tough market conditions and a drop in demand from companies both in the UK and abroad. As a result, job losses from within the sector have also continued into an eighth consecutive month, with many larger firms choosing to hedge their bets and lay off staff members in order to save for another potential dip into recession.
Senior economist at Markit, Rob Dobson, now believes that the pressure is on the service sector to prevent triple-dip recession hitting all areas of business in the UK.
He says; “The onus is now on the far larger service sector to prevent the UK from slipping into a triple-dip recession.
“The on-going weakness of manufacturing and the hard to estimate impact of bad weather on first quarter growth suggest that this is still touch-and-go and that any expansion will be disappointing nonetheless.”
The first quarter of 2013 has been a disappointment for those who expected the manufacturing industry to boost the British economy. With the sector accounting for roughly 20 per cent of British economic output, the pressure to succeed is not quite that faced by services – nonetheless, a recent spate of investments by international car manufacturers went a long way in raising hopes of a recovery.
Sadly, despite investments by companies such as Jaguar Land Rover and Honda, the threat of triple-dip recession appears to be very real. Experts are predicting that the UK economy will post a second consecutive quarter of contraction, thus fulfilling the definition of recession, on the 25th April.
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