* UK Q4 manufacturing output balance +12 vs +27 Q3
* 2012 factory growth f'cast cut to 0.9 pct from 2.2 pct
* EEF trade body: Output seen flat in next 3 months
By Peter Griffiths
LONDON, Dec 5 British manufacturers report
that output is growing at its weakest pace in nearly two years
and expect it to stagnate early next year, held back by worries
about the euro zone and weak demand at home, a survey showed on
The EEF, the main trade body for UK manufacturers, cuts its
2012 growth forecast for the sector to 0.9 percent from 2.2
percent in September, blaming strong headwinds from the global
The survey showed a balance of 12 percent of companies
reporting a rise in output in the fourth quarter, compared with
27 percent in the previous three months, the weakest reading
since the start of 2010.
The new orders balance fell to 4 percent in the three months
to December from 23 percent, also the lowest since the first
quarter of last year.
Manufacturing had been one of the strong points of the UK
recovery from a recession that ended in 2009. However, growth in
the sector, which accounts for about 13 percent of Britain's
GDP, has slowed during this year and the outlook is bleak.
"Short-term confidence has all but fallen away," said EEF
Chief Economist Lee Hopley. "The signs of caution that had been
emerging through the second half of this year have clearly
become more entrenched as global growth concerns have
escalated," she said.
Britain's economy has barely grown in the past year and
public spending cuts to eliminate a bloated budget deficit are
taking hold. The government's fiscal watchdog cut its 2012 GDP
forecast this week to 0.7 percent from March's 2.5 percent.
Fears that Britain will fall back into recession early next
year and uncertainty about the euro zone debt crisis have
undermined confidence among manufacturers.
The balance of companies expecting output to grow in the
next three months fell to zero percent in the fourth quarter
from 22 percent in the third. The export balance fell to its
lowest point since the third quarter of 2009.
The EEF said the pain was being felt across all
manufacturing sectors, with makers of metal products,
electricals and electronics among those hardest hit.
The employment balance held up relatively well in the fourth
quarter at 18 percent, down from the 20 percent reading in the
last survey, published in September. However, a balance of just
5 percent of employers expects to take on staff in the next
A separate survey last week showed Britain's manufacturing
sector shrank for a second successive month in November and at
its fastest pace since June 2009 as output and orders fell on
weak global demand.
* The survey of 453 companies was conducted between Nov. 3
and Nov. 23 for the EEF and BDO, a business advisory firm.