12 December 2002 | Robin Parker
Retail sales in the UK and US are booming while manufacturing continues to struggle, according to the latest economic data.
The CIPS and NTC Research UK purchasing managers' index for manufacturers fell to 50 in November, signalling stagnation as purchasers streamlined production to cut costs.
Signs of future recovery included a slight growth in future orders, but it was offset by weaker foreign demand.
Retail sales volumes were above average, and wholesalers' sales rose at the fastest rate in six months, the Confederation of British Industry reported.
In a business trends report, accountancy firm BDO Stoy Hayward called for UK interest rates to be cut early next year to stimulate the economy.
The Bank of England froze interest rates at 4 per cent for the thirteenth successive month last week.
Chancellor Gordon Brown also revised this year's gross domestic product growth from 2.5 per cent to 1.6 per cent in his pre-budget report.
US manufacturers reported weak demand in November, despite signs of growth.
Spending rose by 0.3 per cent in October and three-quarters of US consumers were estimated to have gone shopping over the Thanksgiving weekend.
Leading supermarket Wal-Mart boasted record daily sales during the weekend, up 14 per cent on 2001.
A large proportion of this is believed to have come from discount offers, but continued strong sales could boost demand for new orders, which contracted for the first time since August, according to Institute for Supply Management (ISM) data.
Norbert Ore, chair of the ISM Manufacturing Business Survey Committee, said: "The overall economy is holding up, but the manufacturing sector is feeling the brunt of the downturn. The sector continues to need drivers that will help end the stagnation."