TOP NEWS: UK manufacturing decline accelerates as difficult year … – Morningstar

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(Alliance News) – The downturn in the UK’s manufacturing sector worsened in December, survey results showed on Tuesday, as new business plummeted.
The seasonally adjusted S&P Global/CIPS UK manufacturing purchasing managers’ index fell to 45.3 points in December from 46.5 in November. The reading was a 31-month low, but came in above the previous flash estimate of 44.7.
With readings remaining below the 50-point no-change mark, December was the fifth consecutive month of contraction in UK manufacturing activity.
Output saw one of its steepest falls in the past 14 years, as new orders weakened and supply chain issues continued to plague the sector.
The decline in new business was “worryingly steep”, according to Rob Dobson, director at S&P Global Market Intelligence.
“Clients are increasingly downbeat and reluctant to commit to new contracts, not just in the UK but also in key markets like the US, China and the EU. The weakness in the latter is still being exacerbated by the constraints of Brexit, as higher costs, administrative burdens and shipping delays encourage increasing numbers of clients to shun trade with the UK,” he said.
The downturn in the sector was seen in the labour market as well, with a third consecutive month of job cuts, at the fastest pace since October 2020.
On a more positive note, inflationary pressures continued to slow for input prices and factory selling prices. However, this was mostly down to weakened demand, Dobson noted.
“It is unlikely to provide much real respite for manufacturers and their operating margins as they head into what looks like being a difficult 2023,” he warned.
The PMI is compiled from responses to surveys sent to purchasing managers’ at around 650 manufacturers in the UK, with data collected between December 6 and 20.
By Elizabeth Winter, Alliance News senior markets reporter
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Copyright 2022 Alliance News Ltd. All Rights Reserved.
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