Food and drink manufacturers experienced an increase in UK demand during the last three months, buoyed by rising wages and exceptionally low inflation, according to the organisation that represents the country’s manufacturing sector.
But a disappointing quarter more generally caused the EEF to revise its forecast of growth within the food and drink industry to 0.6% – down from 2.2% at the start of the year, and a dramatic decline on the 5% growth it enjoyed during 2014. The organisation also anticipated job creation to stand at 1% in its quarterly Manufacturing Outlook report.
Downward price pressures remained evident, the EEF said, as lower input costs and increased competition staved off price rises.
In the publication, the EEF continued: “While falling prices boost consumer demand, supermarket price wars and restructuring of supply chains is putting pressure on food and drink manufacturers. As a result, while we expect the sector to grow this year, it is likely to be at a more moderate pace than we previously forecast. There is however, some upside risk as large events such as the Rugby World Cup can push up demand for food and drink products.”
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