UK textile sector lacking investment
According to manufacturers' organisation EEF, the UK's manufacturing sector is struggling to hold its head above water because of insufficient investment in machinery and technology.
Business investment during the second quarter is believed to be around 10% lower than during the first quarter of 2008 and 18% lower than the corresponding quarter last year. This decline in investment was seen most widely in the manufacturing sector, with investment down 17%. Investment in the textile, apparel, footwear and leather segment fell 25%.
Commenting on the data, EEF economist Lee Hopley said: "Manufacturing investment has been a casualty of the global recession as both cashflow and confidence have been hit hard. Such a rapid and significant pull back in investment in modern machinery and equipment presents risks for a durable recovery, especially as investment intentions can be slow to recover following a downturn. Support from government, in the form of a temporary increase in capital allowances has been put in place, but the falls in investment this year make a case for extending this extension at the Pre-Budget imperative."
