The IHS Markit/CIPS UK manufacturing PMI® for November read 48.9, down from October’s 49.6 and indicating that output, new orders and employment all declined month on month.
The decline in output accelerated slightly as companies scaled back in the face of lower new order intakes and manufacturers eroded Brexit-related inventory builds. Domestic and export new order demand was weaker – export orders fell sharply. Destocking by domestic customers was a factor, together with global economic uncertainty continued to weigh on order levels. Manufacturing employment fell in November for the eighth consecutive month, with the rate of job losses the steepest since Autumn 2012.
The downturn in investment goods production remained severe with production, new orders, exports and employment all contracting at the steepest rate of all the sub-categories. Output, new orders and employment also fell in the intermediate goods sector. Consumer goods producers alone saw growth in new orders and output.
The ‘Brexit effect’ on inventories was evident, with finished goods inventories falling at the steepest rate in two and a half years while input buying volumes fell distinctly.
Average selling prices increased for the forty-third month in a row but charge inflation remained relatively mild. Input costs decreased marginally for the first time since Spring 2016, linked to lower global commodity prices and currency exchange effects.