For the sixth consecutive month in January the UK’s manufacturing sector has shrunk as companies were suffering from weak demand along with high inflation, shortages of raw materials and staff.
In January the S&P Global/CIPS UK Manufacturing PMI scored 47, which is up from 45.3 in December, and if the score is below 50 this means the sector is contracting.
Rob Dobson, director at S&P Global Market Intelligence said, “UK manufacturers faced a tough operating environment at the start of 2023, leading to reducing intakes of new business, declining production volumes and lower staffing levels.
“Weak demand at home and overseas, supply chain constraints, strikes and the continuing impact of high inflation all stymied the performance of manufacturers.
“Weak economic growth in the US, EMEA (Europe, the Middle East and Africa) and across Asia is also dragging down new export wins, exacerbating the strain already caused by port delays and lingering Brexit complications.”
Dobson added, that because the contraction was slower at the end of 2022, it is “a possible sign that we may be past the worst of the downturn in industry.”
Dr John Glen, chief economist at the Chartered Institute of Procurement & Supply, said, “Concerns around a global and a deeper UK recession were cited and manufacturers reined back on job creation, reduced their staff numbers to protect profit margins or were unable to find the right skills.
“The good reason came in the form of improved supply lines that had been struggling since the pandemic but also since Brexit.
“January saw the least marked lengthening of supplier lead times since January 2020 which may have impacted optimism amongst the makers rising to April 2022 levels.”