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Friday, 6 December, 2002, 11:05 GMT
Manufacturing slump continues
Steel Factory in Wales
Manufacturers are still suffering falling demand
Britain's manufacturers are still struggling, according to the latest official figures.

They show a surprise fall in production in October, with the industry dragged down by a slump in pharmaceutical and motor output.

The Office for National Statistics (ONS) said manufacturing output fell 0.7% compared with a month earlier, leaving figures 2.4% below levels at the same time last year.

October's fall was the biggest since June and disappointed economists, who had been looking for a 0.1% rise.


It is still pretty grim for manufacturers

Geoffrey Dicks, RBS Financial Markets

Geoffrey Dicks at RBS Financial Markets described the results as 'awful'.

"It is the fourth successive monthly decline," said Mr Dicks.

Slow motors

The ONS said the biggest falls had been in the pharmaceutical sector, where output fell 8.8% in October.

A 5.7% drop motor vehicle output also hit the figures.

"It is still pretty grim for manufacturers," Mr Dicks added.

But he suggested brighter times ahead.

"The global economy is finally beginning to suggest that the worst is probably behind us."


The global economy looks weak and recovery prospects remain fragile

Peter Gutmann, Experian Business Strategies

Britain's manufacturing industry has been knocked by weak demand in the past few years because of the strong pound and the weak euro, and the recent slowing of the world economy.

A survey from the Confederation of British Industry (CBI) suggested last month that manufacturers' confidence in the business situation had fallen in 10 of its 11 regions.

Worst over?

The sharpest fall was in the south west of England where the mechanical engineering and transport sectors suffered particularly badly.

But the majority of regions also said they expected the situation to improve.

Peter Gutmann of Experian Business Strategies, which produced the CBI report, said: "The worst of the downturn in manufacturing is probably over."

However, he also warned: "The global economy looks weak and recovery prospects remain fragile."

Will the UK economy feel the impact of the US slowdown?

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