UK Manufacturing Downturn Continues In September
October 01 2019 - 4:25AM
RTTF2
The downturn in UK manufacturing continued in September, though
the latest contraction was the slowest in four months, signaling
that the sector is sliding into a recession, monthly survey data
showed Tuesday.
The IHS Markit/Chartered Institute of Procurement & Supply
manufacturing Purchasing Managers' Index rose unexpectedly to 48.3
in September from August's six-and-a-half year low of 47.4.
Economists had forecast the reading to drop to 47.0.
Nonetheless, the headline index has remained below the neutral
50.0 mark for five successive months, its longest sequence below
that mark since mid-2009.
Although the contraction was shallower than in August, levels of
output, new orders, new export business and employment fell further
as rising political, trade and economic uncertainties exacerbated
concerns about Brexit.
Companies cut back production in response to a further reduction
in order intakes. There were lower inflows of new work from both
domestic and overseas markets. Brexit uncertainty and clients
routing supply chains away from the UK still impacted on foreign
demand.
Reflecting lower demand, efforts to control costs and
redundancies, staffing levels declined at the fastest pace since
February 2013.
Firms again raised purchasing as part of Brexit preparations.
Inflationary pressures remained relatively contained, as rates of
increase in input costs and selling prices both eased.
Business optimism remained at a subdued level in September,
despite improving from the series-record low.
"Brexit combined with a slowdown in the global economy, rising
trade tensions and potential oil supply difficulties in the Middle
East, means we're likely to see a chilling end to the last quarter
as Halloween approaches," Duncan Brock, group director at the CIPS,
said.
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