Export orders dive makes Osborne vow look hollow

Chancellor George Osborne's conference pledge to "get Britain making things again" looked hollow today as manufacturers suffered the fastest collapse in exports for more than two years in September.

The latest Chartered Institute of Purchasing & Supply/Markit survey signalled modest growth after a fall in August, but CIPS warned that past orders had fuelled the expansion while new orders were drying up thanks to Europe's mounting economic woes.

New export orders fell at the fastest pace since May 2009 as demand fell across Europe, the US, Asia and the Middle East.

CIPS chief executive David Noble said the figures offered "some cause for relief" after August's decline but added: "Many manufacturers are living off the backlog of orders they have yet to complete."

The figures come ahead of the Bank of England's monetary policy committee meeting this week, which could sanction a return to quantitative easing.

According to the CIPS data, manufacturers stagnated between July and September after a boom at the start of the year fizzled out. In another gloomy sign for the UK jobs market, firms also cut jobs for the third month in a row.

Ernst & Young economic adviser Nida Ali said: "The decline in export orders is particularly worrying, given the heavy reliance of the economic recovery on exports."