UK manufacturing saw a “retrenchment in purchasing activity” in November against the backdrop of weak demand, rising costs and high stock holdings, according to the latest PMI.
Shortages of components and supply chain disruptions contributed to an ongoing contraction in UK manufacturing, though there was an easing in input price inflation.
The S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index rose slightly to 46.5 in November, up on 46.2 in October, but below 50 and in contraction territory.
“Weak sentiment and declining intakes of new work led to job losses, a retrenchment in purchasing activity and an accumulation of finished goods inventory that will likely provide a further brake to output during the months ahead,” said Rob Dobson, director at S&P Global Market Intelligence.
“Companies are also reporting rising recession fears, weak consumer spending and subdued client confidence.”
Reduced input demand lessened the pressure on suppliers and while vendor lead times lengthened, it was to the least extent since January 2020.
A vast array of inputs were reported to be up in price but unsurprisingly energy was the most widespread.
John Glen, chief economist at CIPS, said: “A lethal cocktail of Brexit, logistics constraints, high costs and low demand contributed to the continued decline in manufacturing output in November which also fed into deteriorating job numbers for a second month in a row.”
He added: “A depressing result for the country’s makers as optimism fell to its lowest since April 2020. One vestige of hope is that with stock levels rising at the fastest rate for over three-and-a-half years, supplier deliveries to end consumers and other manufacturers should be much quicker once the economy starts to improve.”
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