British producers reported certainly one of their sharpest falls in exercise because the 2008-09 recession final month, as new orders fell sharply and corporations reduce jobs, a month-to-month survey confirmed on Tuesday.
The S&P Global/CIPS U.Ok. manufacturing Purchasing Managers’ Index (PMI) sank to 45.3 in December from 46.5 in November, its lowest since May 2009 other than two months at the beginning of the COVID-19 pandemic in 2020.
The studying was stronger than an preliminary estimate of 44.7 launched final month, however nicely beneath the 47.8 reported within the equal eurozone survey on Monday.
“Output contracted at one of the quickest rates during the past 14 years, as new order inflows weakened,” S&P director Rob Dobson stated. “The decline in new business was worryingly steep, as weak domestic demand was accompanied by a further marked drop in new orders from overseas.”
The figures broadly chime with a depressing outlook issued final month by the commerce affiliation Make UK, which forecast output within the sector would fall 3.2% in 2023. The newest official information reveals that third-quarter manufacturing facility output was 6.8% decrease than a yr earlier than.
Government price range forecasters predicted in November that the British economic system as a complete would shrink 1.4% this yr as companies and households proceed to face excessive inflation.
Manufacturers within the PMI survey have been barely extra upbeat in regards to the yr forward. Expectations of future output rose to a five-month excessive as provide chain difficulties turned much less acute and inflation pressures fell to the bottom since late 2020.
But factories nonetheless reduce jobs by essentially the most since October 2020, as orders fell from each home clients and shoppers in China, the United States, mainland Europe and Ireland.
“The main driver of lost export contracts was weak global economic conditions, while there was also mention of Brexit-related issues, such as shipping delays and higher costs, leading some EU clients to source products elsewhere,” S&P Global stated.
