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UK Manufacturing Faces Turbulent Times Amid Trade Challenges

British manufacturers are grappling with a challenging economic landscape as trade uncertainties and rising costs weigh heavily on the sector. The S&P Global UK Purchasing Managers' Index (PMI) for manufacturing fell to 44.9 in March, marking its lowest point since October 2023. This decline reflects a contraction in activity, with new export orders dropping at the fastest rate since August 2023. The downturn has been attributed to multiple factors, including the threat of tariffs from the United States, increased payroll taxes, and a rise in the national minimum wage. Smaller manufacturers have been hit particularly hard, with many reporting a decline in new orders and reduced business optimism. Only 44% of manufacturers expect output to increase over the coming year, a significant drop from 56% in the previous month. Geopolitical tensions and economic slowdowns in key markets such as the US and Europe have further compounded the challenges. Despite these headwinds, the servic...
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Businesses urge Ottawa to extend CEBA loan deadline amid economic slowdown


The Canada Emergency Bank Account (CEBA) loan program, which provided nearly a million businesses with up to $60,000 in interest-free loans to cope with the COVID-19 pandemic, is set to expire on Thursday. Businesses that repay the loan by the deadline can receive partial forgiveness of up to $20,000, or one-third of the loan. After the deadline, the debt is rolled into a three-year loan with a five per cent annual interest rate.

However, many business groups are calling on the federal government to give CEBA loan holders more time to repay the loans and receive the forgiveness, citing the ongoing economic challenges and lockdowns caused by the virus. They argue that forcing businesses to repay the loans now could lead to more insolvencies and closures, especially in hard-hit sectors such as accommodation and food services.

The federal government, on the other hand, has warned that delaying or forgiving CEBA loans would have significant financial consequences for the public finances, as it would add to the already large deficits and debt. Economists at Desjardins estimate that more than half of businesses in Canada received the CEBA loan, and that the total amount distributed was $49.2 billion. They also caution that postponing or cancelling the repayment of the loans could risk additional upward pressure on interest rates, which could affect the cost of borrowing for the government and the private sector.

The CEBA loan program was one of the key measures introduced by the federal government to support businesses during the pandemic. It was launched in April 2020 and was later expanded to include more eligible businesses and increase the loan amount. Businesses that received the loan can use it for expenses such as rent, payroll, utilities, and insurance. The program is administered by financial institutions in cooperation with Export Development Canada.

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