Manufacturers hiring more people despite rollercoaster ride
EEF, a lobby group for engineering and manufacturing employers, says a “rollercoaster of risks” is taking its toll on UK manufacturing. The group has slashed its 2015 forecast for manufacturing growth to 0.7% from 1.5%.
Volatile Chinese markets and the uncertain future of Greece in the EU are among the challenges facing industry, said the lobby.
Export orders have suffered as a consequence, it said in a report. There are two “important” exceptions to this trend, said EEF. Manufacturers’ investment and recruitment intentions are both looking up, with 6% more firms planning to hire more workers during the next quarter and a balance of 2% planning to increase investment.
‘Turbulence and uncertainty’
Lee Hopley, chief economist at EEF, said: “While UK data has continued to point to solid growth, UK manufacturing is having to contend with a rollercoaster of risks from the rest of the world.
“We’ve seen the future of the Eurozone on the line once again, turbulence and uncertainty over China and Greece and, of course, oil and gas are still a concern,” she added.
The forecast comes after a warning from the International Monetary Fund that slower growth in China and continuing stock market uncertainty pose a threat to global economic growth.
The troubles in China have sent the prices of commodities such as oil and copper sliding.
In a separate report, accountants KPMG said permanent job placements and billings for temporary jobs both grew at the slowest rate in more than two years in August.
While vacancies rose, the number of applicants declined, leading to some increase in what employers were willing to pay, said KPMG in their research.
And the Federation of Small Businesses (FSB) reported a “cooling” of confidence among their members.
“Lower levels of confidence are reflected in more firms reporting a fall in investment intentions this quarter, which have fallen from 26% 12 months ago to 22% this quarter,” it said.