October 22, 2019 / 11:13 AM / a month ago

UPDATE 1-UK industry outlook weakest since 2009 on Brexit and world slowdown - CBI

 (Adds details)
    By David Milliken
    LONDON, Oct 22 (Reuters) - British manufacturers expect the
most widespread drop-off in orders for a decade over the next
three months due to the slowing global economy and Brexit
uncertainty, a survey by the Confederation of British Industry
showed on Tuesday.
    The CBI said its quarterly expected orders balance sank to
-19 in October from +10 in July, the lowest since April 2009,
driven by a steep drop in orders expected from overseas.
    Britain is due to leave the European Union on Oct. 31 if
Prime Minister Boris Johnson can persuade parliament to rush
through a new exit deal he negotiated last week, though a delay
looks likely if lawmakers want more time for scrutiny.
    On top of this, the trade conflict between the United States
and China is hitting demand for exports far beyond those two
countries' borders.
    Factories said they expected their competitiveness to
deteriorate at the fastest rate since the survey began more than
40 years ago, due to a record amount of political uncertainty
and the biggest concern about trade barriers since 1983.
    Economist Samuel Tombs of Pantheon Macroeconomics described
the CBI data as "dire".
    "Manufacturers appear to be experiencing the full force of
the global downturn and aren't enjoying any relief this time
from preparations ahead of the October Brexit deadline," he
said.
    In October alone, manufacturers reported the biggest fall in
export demand since December 2009, during the depths of the
financial crisis, while the overall orders balance for October
sank to -37 from -28 in September, below all forecasts in a
Reuters poll and its lowest since March 2010.
    "A combination of Brexit uncertainty and weaker global
growth are clearly hitting sentiment and export prospects, with
job prospects at their weakest since the global financial
crisis," CBI chief economist Rain Newton-Smith said.
    The CBI data has not always matched subsequent official
measures of industrial output, particularly at times when
political turmoil has hit sentiment.
    But it bodes poorly for business investment and hiring
intentions.
    Firms planned to scale back investment on the broadest basis
since 2009, while hiring - which has held up well by comparison
since 2016's Brexit referendum - is expected to be the weakest
in a decade as well.

 (Reporting by David Milliken,
Editing by William Schomberg and Ed Osmond)
  
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