Fears are growing over the state of the UK economy as it emerged that the manufacturing sector shrank by about 4% this year and is forecast to decline by a further 3.2% in 2023.
Increasing raw material costs, sagging consumer demand, staff shortages and higher borrowing costs have collectively formed the perfect storm for the UK manufacturing sector, according to the latest Make UK/BDO outlook report. The study showed that investment in the sector has gone “negative” for the first time in nearly two years.
The report suggests that the manufacturing sector is likely to be 7% smaller by the end of next year, although the report’s authors stressed that the 4% fall for this year is relative to a strong 2021, which experienced a pandemic bounceback.
The dire figures came as policymakers at the Bank of England weigh up whether to raise interest rates again on Thursday.
Make UK said it has been consistently revising down its forecasts…