Final data published by S&P Global/CIPS showed that business activity in the UK manufacturing sector determined again in November and reached a nine-month low as concerns surrounding the economic outlook, high costs and weak demand led to lower output, falling orders and cutbacks to purchasing, jobs and inventory holdings.
UK manufacturing PMI fell to 48.0 points from 49.9 points in October. Economists had expected a decline to 48.6 points. An index reading below 50 points indicates a contraction in activity in the sector.
The report also showed that manufacturing output fell for the first time in seven months, as weaker demand from domestic and overseas clients led to a scaling back of production volumes. Meanwhile, new orders fell again in November, with the rate of contract reaching a 9-month high. Survey respondents linked the declines in output and new orders to delayed investment decisions, cutbacks to new projects due to domestic market uncertainty and rising geopolitical tensions. New export orders also fell in November amid reports of lower demand from the US, China, the EU and the Middle East. Employment in the manufacturing sector fell for the second time in the past three months, with the rate of job losses the quickest since February. Cuts were linked to concerns over rising cost pressures and weak demand. The data also showed that the outlook for the manufacturing sector remained positive overall in November. Over half of companies (52%, unchanged from October) forecast that production would rise over the coming year, compared to only 11% anticipating contraction (up from 8%). As for the inflationary situation, the data showed a mild uptick in the rate of input price inflation, while selling price inflation eased to a 9-month low.