GKN warns of weakening markets

Global engineering firm GKN warned that macroeconomic conditions have deteriorated in recent weeks and it was seeing evidence of softening in order books.

This was particularly evident in European automotive and industrial markets, it said.

The company added that other automotive markets and the civil aerospace market were expected to remain solid, but the weakening markets were expected to have some impact on performance.

The news came as the firm announced group sales in the three months to the end of September totalled £1.6bn, an 8% increase over the comparable period in 2011, half of which was organic growth.

Pre-tax profit fell slightly to £99m from £100m the year before, while GKN's trading margin reduced to 7.1% from 7.6%, mainly due to lower demand at its Driveline business.

Chief Executive Nigel Stein said in the third quarter, the group's global footprint, with its exposure to the

strong markets of North America and China, as well as civil aerospace, allowed it to offset weaker European markets.

"Looking forward, European markets seem to be softening further," he said.

"We continue to focus on driving performance, keeping close control of our cost base."