Manufacturing index at 10-year low

31 July 2008
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01 August 2008 | Jake Kanter

Activity in the manufacturing industry fell to its lowest level since 1998 last month, as input costs rocketed.

According to the latest CIPS/Markit Purchasing Managers' Index for UK manufacturing, where a figure below 50 represents contraction, activity in the sector recorded 44.3 in July. It marks a further drop after June's seven-year low of 45.9.

The level of domestic orders fell at its fastest rate in over nine years to 40.5, compared with 43.7 the month before. Current economic difficulties and the downturn in the housing market were blamed for the decline. As a result, the volume of uncompleted work contracted to a new record low. In June, the backlog of work registered 39.9, but this fell to 39.5 last month.

The output index rose slightly from the nine-year low of 43.6 in June, to reach 43.8. But longer supplier lead times and shortages of raw materials disrupted production schedules.

Input prices rose to another survey high, recording 82.4, compared with 82.1 last month. The high price of oil was the main factor, which boosted chemical, energy, plastic and transport costs.

This affected staff levels, which fell to 43.3, as reductions in headcounts took its toll. In June, the employment index registered 46.2.

* Further coverage of PMI reports is available at


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HS2 Ltd
London (Greater)
£50,800 plus up to £10,000 Recruitment Retention Allowance
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