LONDON (Reuters) - British manufacturing is locked in a nosedive as orders and investment dry up due to the global slowdown and the Brexit crisis, a survey from trade body Make UK showed on Thursday, adding to signs of a worsening economic outlook.
Domestic new orders declined in the third quarter for the first time in three years, while export orders growth also weakened despite the recent fall in the exchange rate, Make UK and accountants BDO said.
The survey from was the latest to suggest the world’s fifth-biggest economy is in danger of entering recession as the Brexit turmoil intensifies.
“On current trends the economy, and the manufacturing sector in particular, looks headed towards a very challenging winter,” Make UK chief economist Seamus Nevin and BDO head of manufacturing Tom Lawton said in a joint statement.
An IHS Markit/CIPS survey published on Monday showed British manufacturing activity - which accounts for about 10% of the overall economy — contracted last month at the fastest rate in seven years.
The Make UK/BDO report showed investment intentions turned negative for the first time in three years.
“Ominously, companies are cutting back on investment in transport equipment, factory machinery, and IT, just at the point in the economic cycle when spending would normally increase,” the report said.
The manufacturing-heavy East Midlands region of England suffered the sharpest fall in manufacturing output and orders in the third quarter, Make UK said, echoing a Lloyds Bank survey last week that showed the region struggled the most in August.
Make UK and BDO surveyed 292 companies between July 31 and Aug. 21.
Reporting by Andy Bruce; Editing by William Schomberg