PMI shows UK Manufacturing remains in contraction

Posted on: October 1st, 2019 by cbmEditor

The IHS Markit/CIPS UK Manufacturing PMI® read 48.3 in September up from August’s reading of 47.4. While a four month high reading it still reflected an industry in contraction.

Levels of output, new orders, new export business and employment all fell further in the month. Purchasing activity and input buying volumes rose for the first time in recent months, as some companies restarted Brexit preparations. 
The contraction in manufacturing production was strongest in the investment sector, with steep drops in both output and new business. The consumer goods sector was the only category to record an output rise in September. The intermediate goods sector stagnated. Intakes of new work decreased in both sectors. 
Companies reported lower inflows of new work from both domestic and overseas markets, with the trend in the former particularly weak. The rate of decline in new export business was much slower in September than in August but there were further reports that clients were re-routing supply chains away from the UK. 
Employment levels fell at the sharpest pace since February 2013, with job losses reported as widespread, in all sub-sectors and in all sizes of companies. Companies reported capacity needing to be reduced due to lower demand, with greater emphasis on controlling costs and evidence of both redundancies and natural wastage affecting employment levels. 
Business optimism improved from August’s low reading but remained subdued. 

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