The gap between the relative manufacturing performance of Germany, France, Italy and the UK continues to narrow, according to data from KPMG's Centre for Manufacturing Consultancy. The continued slowdown in the German economy, where GDP is expected to drop by 2% this year, remains a source of concern for the rest of the EC. Problems in Germany will not leave the less powerful EC members unscathed. The UK's manufacturing performance has been less volatility over the past year than in Germany, France and Italy but, despite our favourably low inflation rate, it is not yet out of the woods. Manufacturing output recovered its momentum in April, having fallen back in March. However, while UK unemployment fell by 26,000 between April and May, manufacturing overtime and employment, which rose for the first quarter, fell back in April. Inflation must remain low to bolster uncertain recovery.
How the index works: the six factors by which each country's relative manufacturing performance is measured are: GDP in manufacturing, excluding oil and construction; productivity; levels of finished stock; current order books; capacity utilisation; and change in consumer prices. We have assumed the standing of each country in January1989 to be identical to show relative performance of the latest three-year cycle. All statistics are taken from the EC database to ensure strict comparability.
Data compiled by KPMG's Centre for Manufacturing Consultancy. Source: EC Commission/WEFA