Responding to figures showing an official recession in the manufacturing sector, Brendan Barber, TUC Deputy General Secretary, said, "Last week's interest rate cut was a welcome move but there is far more we could be doing to help our manufacturing sector. Britain gives less state aid to manufacturing than almost any other country in Europe. The TUC wants to see at an extra £1bn for regional industrial development because the problems of the sector are disproportionately spread across the country."
Meanwhile, there appears to be a difference of opinion between unions and business leaders on the number of manuafacturing jobs under threat as the sector slips into recession. Union leaders are claiming that as many as 250,000 jobs are at risk whilst the CBI is going for a much more reserved 29,000 jobs at risk by the end of this summer.
Figures from the National Office for Statistics indicate that whilst manufacturing output for June 2001 increased by 0.3%, for the quarter as a whole it was down by 2%. The second quarter fall follows the first quarter fall of 7% from January to March. Two successive quarterly declines in manufacturing output officially puts the manufacturing sector into recession.
The Transport and General Workers Union siad that the "dismal" figures showed a need for urgent action to tackle productivity and to boost investment.
Speaking for the AEEU, Sir Ken Jackson, the union's president, said, "These figures confirm our fears about the growth of a two speed economy in Britain. Construction, aerospace and pharmaceuticals are continuing to do well but other manufacturing sectors are clearly not."
CBI sources indicate that they are expecting exports to drop to their lowest level for three years and job losses within the maufacturing sector have already started, and they expect the losses will be spread throughout the country.
Current indications are that interest rates, which were dropped by the Bank of England's Monetary Policy Committee last Thursday to 5%, will continue to be under pressure for further reductions. Underlying inflation levels, currently running at around 2.5% continues to be watched closely as consumer spending continues.
