Manufacturing output sinks at fastest rate since early months of Covid pandemic
Manufacturing production and new orders in the UK slumped last month, sinking at the fastest rate since since the early months of the Covid pandemic two years ago.
Firms are experiencing a downturn in the sector, as manufacturers have been hit with a reversal in new orders from domestic and overseas customers.
Headwinds have been sky-rocketing all while customer demand has dropped, causing business confidence to plummet.
August marked the largest contraction since May 2020, the latest S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) data revealed on Thursday.
The index dropped to 47.3 from 52.1 in July, with numbers below 50 suggesting a contraction.
Analysts said that the data indicated signs of an emerging recession in the manufacturing sector.
“Faced with a multitude of cost pressures alongside rising inflation, manufacturers are increasingly searching for efficiencies or delaying investments,” she warned.
Energy-intensive firms in particular are set to be increasingly concerned about how much longer they can survived such heightened pressures, Shalom added.
There was weaker demand from key markets last month, with key markets including China, the US and the EU all subdued.
Dampening demand in these markets has intensified supply chain issues that arose after the Covid lockdowns and Brexit, according to the PMI report.