OCR 2888 - Euro Area Industry in Recession
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British manufacturing industry is suffering from a sharp drop in production due to a backdrop of a weakening world economy and domestic recession. Even the lower pound which ought to make our products more competitive is having a muted effect because of the slowdown in real incomes and demand in our major export markets.
In the Euro Area too industrial production is contracting at an alarming rate as our chart shows. And once more the US dollar seems to be weakening against the Euro which will make life harder for European manufacturing businesses heading into 2009.
And in a week when German politicians have criticized the ‘crass Keynesianism’ of Brown and Darling’s macroeconomic policies, it is worth noting that capital goods production in the world’s biggest manufactured goods exporter is heading south at a rate of knots.
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