UK factory production sees longest downturn since 2008 financial crisis
The speed at which the manufacturing industry is shrinking slowed slightly in October, according to a closely watched PMI survey.
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Your support makes all the difference.UK factory production has seen the longest period of decline since the global financial crisis as the sector weighs heavy on the economy, an influential survey has found.
The speed at which the manufacturing industry is shrinking slowed slightly in October.
The closely watched S&P Global/CIPS UK manufacturing PMI survey rose from 44.3 in September to 44.8 last month.
But the score came in below earlier estimates of a reading of 45.2, and marks the 15th month in a row that manufacturing activity has declined.
The factory sector remains a weight dragging on an economy already skirting with recession
Any score below 50 is considered to show contraction in the sector.
Production output fell for the eighth month in a row, the longest sequence of continual decline since 2008 to 2009, the survey revealed.
Weak demand on British shores and overseas has led to fewer orders for manufacturers, the report said.
Exports have been stagnating for nearly two years, with less new work coming from Europe, China and Brazil.
But price pressures declined last month, with firms seeing lower costs for energy, fuel and transportation, and commodities including paper and steel.
It comes ahead of the Bank of England announcing the decision on UK interest rates on Thursday, with policymakers likely to consider the signs that inflationary pressures continue to ease while the sector battles a prolonged downturn.
Rob Dobson, director at S&P Global Market Intelligence, said: “The UK manufacturing downturn continued at the start of the final quarter of the year, meaning the factory sector remains a weight dragging on an economy already skirting with recession.
“Companies are finding trading conditions difficult as they face headwinds from client destocking, market uncertainty and the impact of the cost-of-living crisis on consumer demand.”
Manufacturers have reported job losses every month for more than a year, although the rate of contraction eased slightly last month.
Until recently, manufacturers have been reliant on a backlog of work that has kept industry’s ship afloat, even at the worst of times
It suggests businesses are looking to shore up cash as they report having spare capacity from taking on less new work and clearing backlogs, the survey found.
The cumulative effect of tough business conditions led optimism among firms to drop to a 10-month low in October.
Nevertheless, more than half of those surveyed said they expect output to rise over the coming year, with hopes bolstered by planned production launches and a possible revival of market conditions.
Fhaheen Khan, senior economist at manufacturers’ organisation Make UK, said: “Until recently, manufacturers have been reliant on a backlog of work that has kept industry’s ship afloat, even at the worst of times.
“Now, however, it is becoming evident that the tides are beginning to sway against the sector’s progress with expectations for the coming year becoming more unfavourable by the day, especially in the continued absence of a long term industrial strategy from Government.”