LONDON (Reuters) - Britain's manufacturing sector is likely to grow less this year than previously thought due to reduced investment by oil and gas companies, the country's main trade association for manufacturers said on Monday.
The EEF cut its forecast for manufacturing growth in 2015 to 1.5 percent from 1.7 percent, barely half last year's 2.9 percent growth rate.
"Much of this weakening is down to the impact of the decline in oil and gas activity on the supply chain," Lee Hopley, the EEF's chief economist, said.
Official figures on Thursday showed that manufacturing output grew by just 0.1 percent in the first three months of 2015, and the Confederation of British Industry reported a slowdown in factory orders in May.
"There is a range of challenging factors at play, but the net result is that this weakening trend looks set to continue, potentially even through to the end of the year," Hopley said.
Oil prices have fallen by more than 40 percent over the past year, and British oil and gas output has fallen by 5 percent over the same period.
The EEF said it expected Britain's economy as a whole would grow by 2.6 percent, down from an earlier estimate of 2.8 percent, and in line with a recent Bank of England forecast.