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Comment on the ONS manufacturing figures for September

"The 1.3 per cent drop in manufacturing output is one of the largest we have seen this year. While it was expected, it clearly demonstrates that the current economic conditions are really starting to bite, particularly for sectors such as automotive which has seen a steeper drop off in activity. The combination of increased costs and falling demand, together with global economic uncertainty means manufacturers are having to reduce their cost base to match the decline in activity, scale back on capital expenditure in order to reserve cash and constantly revise their forecasting.

“However, despite these pressures there is a degree of insulation for those manufacturers that have a diversified product range and geographical spread, particularly those serving the Middle East and Southeast Asia which continue to be strong. The fall in the pound is both a curse and a blessing. Manufacturers exporting to Europe continue to see the upside of a strong Euro, while for others it represents yet another increased cost.”