WELSH INDUSTRY BUCKS THE UK TREND WITH A FALL IN OPTIMISM
Business confidence among Welsh manufacturers has fallen for the first time since last January according to the latest CBI quarterly Welsh Industrial Trends Survey, published today.
The fall comes as business confidence in manufacturing across the UK as whole is beginning to rise. It also shows that costs for Welsh manufacturers look set to increase whilst slight decreases in costs are being predicted overall for the UK. That, coupled with a further fall in prices and a decline in exports, is squeezing margins even tighter.
Commenting on the results of the survey, Rudi Plaut, Chair of the CBI Wales Economic Trends Panel, said:
Cheaper imports and competition in export markets from producers in lower cost locations continue to drive down prices, whilst Welsh businesses are faced with rising costs, including new taxes and regulations such as the Climate Change Levy.
But the most worrying consequence of the continued squeeze on margins is the significant fall in planned investment shown in this survey. Not only are we seeing a further decline in investment in plant and machinery, but we are now seeing plans to cut investment in product development and staff training. This is bad news, particularly because the long-term competitiveness of many businesses depends on their ability to innovate."
CBI Wales Director, David Rosser, added:
"The Assembly’s plans to increase Welsh GDP will rely on continued investment by the private sector and this survey clearly shows that Welsh manufacturers are struggling to do so at present.
"Whilst they clearly cannot control exchange rates, there is much the Assembly could be doing to promote investment and reduce costs, through its policies on learning, transport, and planning in particular."
1 February, 2001
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