Clearview National August 2015 - Issue 165 | Page 88

businessnews

Eurozone issues concerning UK manufacturers
»»The latest CIPS UK
Manufacturing PMI has reported
a slowdown in growth, the
lowest growth since early 2013.
KPMG’s UK Head of Industrial
Manufacturing, Stephen Cooper,
said:
“This slowdown in UK
manufacturing growth is
disappointing, considering the
recent steady improvements
in previous months of this
year. The strengthening of the
pound relative to the Euro,
while good for summer holiday
travellers, will not be good for
UK manufacturers as it makes
UK manufactured goods more
expensive for those who import
them. As 40% of UK exports are
still exported to the Eurozone,
any disturbance downwards in
that market will impact negatively
on UK manufacturing.

“Interestingly the Eurozone
has shown positive results in the
past month where growth was
registered in all countries except
Greece. This may change in next
month’s Eurozone PMI if the
uncertainty in the Eurozone with
the current unresolved Greek
debt issue continues.
“The largest global
manufacturing countries of
China and the USA have also
shown a continued contraction
in manufacturing over recent
months due to weaker export
demand for both countries goods.
This, combined with the Eurozone
issue, does not give a good
signal for the coming months for
global manufacturing, and UK
manufactures will be watching
events closely.”

Still feeling the Impact
According to Glenigan, UK construction continues
to feel the impact of the general election as
activity drops for the third consecutive month.
»»The Glenigan Index for last
month, which covered the value of projects
starting on site during the three months
to June, declined by 24% year on year
as housebuilding, office, retail and civil
engineering activity contracted sharply.
The fall was prompted both by decisions
on government funded projects being
postponed in the immediate run-up to the
election and by private developers delaying
project starts until the political outlook was
clearer.
Civil engineering projects saw the
sharpest decline, plummeting by 46%
against a strong performance in the second
quarter of 2014. Non-residential starts
also contracted sharply, being 20% lower
than a year ago. Government funded areas
also declined dropping by 14% and 25%
respectively.

88 » AUG 2015 » CL EARVI E W- UK . C O M

Commenting on last month’s figures,
Allan Wilén, Economics Director at
Glenigan, said: “Pre-election jitters continued
to dampen project starts in the immediate
aftermath of the election. The dip in project
starts will hold back the pace of output
growth this year. However the election result
has reduced political uncertainty in the near
term and we anticipate a bounce back in
private sector project starts over the coming
months as investor confidence returns.”
Residential project starts also declined,
dropping by 18% due to falls in both private
housing and social housing projects starting
on site. The drop in private housing starts is
in sharp contrast to the positive trend seen
over the last two years, and has largely offset
the surge in project starts recorded during the
first quarter of 2015. The decline in social
housing starts was anticipated following

‘anticipate a bounce back in
private sector project starts
over the coming months’
the tightening in funding for registered
landlords.
Source: Glenigan