MTA members see signs of weakness in the 3rd quarter but a positive outcome is still expected for the final quarter in 2007.Weakness down to seasonal effect on orders, in the context of extreme negative publicity about the effects of the credit-crunch on the UK economy.
The results of the Manufacturing Technologies Association Quarterly Trends Survey for the 3rd quarter of 2007 showed a reduction in orders, although some of this is a seasonal effect of the Summer period.
The key points of the survey, which had 105 respondents from across the Association, were:
- The percentage balance for business confidence (see note 2) in the 3rd quarter of 2007 was -13%, having been +6% in the 2nd quarter of the year. This is the first negative balance for two years, although the Equipment Suppliers section registered a positive balance.
- Order intake was -1.9% lower than in the 2nd quarter of 2007, although the Machinery Importers' Section recorded a quarter-on-quarter increase in business.
Respondents in all three sections expect a recovery in order intake during the final period of the year; overall, the respondents predict that orders in the 4th quarter of 2007 will be +2.5% higher than in the 3rd period of the year.
Geoff Noon, MTA statistical Manager commented that "Given the doom and gloom about the ‘credit crunch' appearing in newspapers virtually everyday during the data collection period for this survey, the fact that the percentage balance for confidence was only a modest negative figure is, we believe, a sign that the underlying fundamentals of business in the sector remain positive. Expectations of a positive outcome for business in the last quarter of 2007, coupled with some anecdotal comments, suggest that the decline we saw in the 3rd quarter is largely the effect of the summer holidays and reinforces the view that business levels generally remain good”.