Firms warn of big job losses
6 May, 2003
Up to 86,000 jobs will have been lost in UK manufacturing in the first six months of 2003 if current trends continue, the CBI has warned.
The business organisation said firms have been cutting jobs across the country since Christmas, as orders fall.
The rate at which jobs were cut has so far been fastest in the south east of England and slowest in the south west.
But in the weeks ahead, the most jobs are expected to be slashed in the north west.
The figures add to pressure on the Bank of England's rate-setting Monetary Policy Committee (MPC), which meets on Thursday.
Sharp decline in orders
Some economists expect the MPC to cut rates by a quarter of one percent to 3.5% in an effort to kick start the economy.
The latest quarterly research on manufacturing by the CBI and Experian Business Strategies said the manufacturing decline was being driven by a sharp deterioration in domestic demand.
It said weak global trading conditions had spread to the UK market.
For the first time since July last year, no region recorded an increase in orders during the past four months.
The north west, east midlands and east of England experienced the sharpest declines.
'Deep pessimism'
Export orders were also down in every region expect Yorkshire and the Humber, with substantial falls recorded in the south west and north west.
Five of the UK's 11 economic regions said they expect a modest recovery in orders during the next four months.
But this is unlikely to boost employment, with firms still expecting to continue losing staff in every region except Scotland.
Peter Gutmann, associate director of Experian Business Strategies, said: "The deep pessimism in this survey is partly a timing issue."
'Underlying malaise'
He added: "Sentiment was affected by the uncertainty surrounding the war in Iraq, which coincides with the survey period.
"However, the underlying malaise in the global economy is a depressing factor, clearly reflected in backward looking indicators.
"New orders in the past four months fell at their fastest rate for four years.
"Manufacturers clearly see little to excite them in the current environment."
Unemployment figures
With the war in Iraq now over it remained to be seen whether a global recover would develop which would provide some relief to manufacturers, he added.
Overall UK unemployment - according to the measure favoured by the government - fell again in March, latest figure released last month show.
But the number of people claiming benefit went up for the second month in a row.
The Office for National Statistics (ONS) said the jobless total dropped by 22,000, bringing the total to 1.494 million.
But the number of people out of work and claiming benefit rose by 1,800 to 939,900.
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