Action required after manufacturing slump – Chamber

Man standing by Birmingham Library Leaning Arms folded

Business leaders in Greater Birmingham have urged the Government to put aside its internal squabbles and put the needs of the country first after the manufacturing sector shrank for the second consecutive quarter.

Although UK GDP grew by 0.4 per cent in quarter two, the manufacturing sector is in recession for the first time since 2016 after contracting by 0.9 per cent.

Economic growth was driven by the service sector which increased by 0.5 per cent and construction output which went up by 0.9 per cent.

However, industrial production fell by 0.8 per cent, continuing a trend that began at the start of the year.

The total UK trade deficit widened by £4.7bn to £8.6bn in the three months to June 2018, mainly due to falling goods exports and rising goods imports

Paul Faulkner (pictured), chief executive of the Greater Birmingham Chambers of Commerce, said: “Both the Chancellor and the Governor of the Bank of England will presumably be feeling upbeat about today’s results as both had stressed that we were likely to see a recovery in economic growth following the bad weather at the start of the year.

“Whilst it’s a welcome upturn, we also have to put things into context – overall growth rates remain modest and much of the upturn has been predicated on an usually long bout of sunny weather boosting spending levels.

“With manufacturing output contracting for the second consecutive quarter, this technically means the sector is in recession for the first time in over two years and it was no surprise to see a fall in car exports as fears of a hard Brexit continue to intensify.

“Clearly these results should act as another wake-up call for Government to put aside petty internal squabbles and put the needs of the country first. Businesses need clear guidance on future customs processes and trade relationships in order to make informed decisions and plan for an uncertain future.

“In the midst of this, our advice to local businesses is focus on what you can control. Our Brexit Toolkit gives clear and simple advice on how firms can practically prepare and ready themselves for what is likely to be a testing period.”

 

Click here to access the Brexit toolkit.

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