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1 November 2011 | Angeline
The UK manufacturing sector fell back into contraction in October. It is
now at a 28-month low following a decline in output, new orders and employment.
The Markit/CIPS UK ManufacturingPMI for October, announced today, is 47.4, its lowest level since June 2009. September’s
position of marginal growth was 50.8 – where a figure above 50 indicates an
increase in activity.
A loss of contracts among manufacturing
companies, low client confidence and market uncertainty resulted in the fastest
decline in new orders for 31 months (since March 2009). Companies are reporting
weaker demand in both domestic and overseas markets and their backlog of work
is also declining.
The level of incoming new
export orders fell for the third month running. Reduced orders were received
from customers in mainland Europe, Asia and the US. The reduction is partly
linked to clients delaying purchases or destocking in response to deteriorating
global economic conditions.
scaled back output in response to the reduction in new orders and made job cuts
that led to staffing levels falling for the fourth month running.
Purchasing activity was also
reduced for the third successive month in October. Lower input buying resulted
in the sharpest reduction in holdings of raw material inventory for almost two
CEO David Noble, said: “We live in worrying times. The manufacturing sector, which helped to
keep growth buoyant earlier in the year, is now struggling to keep its head
above water. Following a short-lived improvement last month the manufacturing
PMI has now dropped like a stone to a 28-month low and officially into
The UK government announced
yesterday that it has invested £950 million into the UK manufacturing industry
to help preserve and boost employment in the sector. It approved 119 bids for
funding through the Regional Growth Fund.