# UK’s top manufacturing body slashes forecasts for 2023
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-22
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: UK Manufacturing Growth Forecast Slashed by Make UK
Meta Description: Make UK slashes forecast for factory output growth to 0.6% due to energy costs and demand uncertainty. Brexit trade disruption and weak pound also pose
URL: https://financedigest.com/uks-top-manufacturing-body-slashes-forecasts-for-2023html

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LONDON (Reuters) – Britain’s manufacturers association on Thursday slashed its forecast for growth in factory output next year, citing huge uncertainty around demand and energy prices.

Make UK downgraded its forecast for manufacturing growth for next year to just 0.6%, down from the 1.7% forecast in June.

Soaring energy costs, caused by Russia’s ongoing invasion of Ukraine, have eroded consumer demand and pushed up operating costs for businesses.

“Eyewatering costs and a very difficult international environment… (threaten) to shatter [expectations of a sustained recovery from the pandemic and put many perfectly viable businesses](https://www.financedigest.com/german-businesses-expect-only-mild-recession-as-disruptions-ease.html "German businesses expect only mild recession as disruptions ease") at risk,” said Stephen Phipson, chief executive of Make UK.

A Make UK survey of manufacturers published with accountants BDO showed scant [sign of a boost](https://www.financedigest.com/biden-signs-bill-to-boost-u-s-chips-compete-with-china.html "Biden signs bill to boost U.S. chips, compete with China") to exports from a weak pound, which fell this week to its lowest level against the U.S. [dollar since](https://www.financedigest.com/dollar-heads-for-first-weekly-gain-since-february.html "Dollar heads for first weekly gain since February") 1985.

UK manufacturers have not been able to sell abroad more easily, partly because the high value-added nature of UK manufacturing means many [firms sit in the middle of global](https://www.financedigest.com/sp-global-acquires-firm-to-bolster-capability-to-track-commodity-shipments.html "S&P Global acquires firm to bolster capability to track commodity shipments") supply chains so are less well-positioned to take advantage of relative devaluations in sterling,” Make UK said.

[Brexit trade](https://www.financedigest.com/uk-housing-boom-may-derail-post-brexit-trade-dreams.html "UK housing boom may derail post-Brexit trade dreams") disruption was an additional factor, it said.

The Make UK survey was conducted between August 10 and August 31 – before Liz Truss became prime minister and [announced plans](https://www.financedigest.com/eu-announces-plans-to-lead-green-industrial-revolution.html "EU announces plans to lead green industrial revolution") to help households and businesses through the coming months.

The government said on Wednesday it would cap wholesale electricity and gas costs for businesses at less than half the market rate from next month, helping relieve the pressure of [soaring energy costs](https://www.financedigest.com/amazon-other-retailers-revamp-free-shipping-as-costs-soar.html "Amazon, other retailers revamp ‘free’ shipping as costs soar") but adding to the government’s fast-rising spending.

(Reporting by Humza Jilani, editing by Andy Bruce)


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