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Manufacturing sector continues with downturn

by LLB staff reporter
1st Feb 24 11:10 am

The UK’s manufacturing sector downturn has “continued” at the start of the year and the Red Sea troubles has added to supply chain remains difficult as a result.

In January S&P Global/CIPS UK manufacturing PMI survey increased to 47 compared to 46.2 in December.

Rob Dobson, director at S&P Global Market Intelligence, said, “The downturn in UK manufacturing continued at the start of 2024, with output, new orders and employment all reduced in January.

“The contraction was widespread, with declines in all three variables seen across the consumer, intermediate and investment goods sub-industries.

“The ongoing weakness is leading to an increasingly cost-cautious approach at manufacturers, compelling cutbacks in purchasing and stock holdings as companies aim to achieve efficiencies, protect cash flow and defend fragile margins.”

Glynn Bellamy, UK head of industrial products for KPMG, said, “While the headline figure shows monthly improvement for the UK manufacturing sector, domestic and international challenges remain, including the developing supply chain impact from shipping disruption in the Red Sea.

“Ocean freight costs have risen, as have supplier delivery times, contributing to increasing costs and slowing production for the manufacturing sector.

“This threatens to reverse the recent good news story of falling inflation and once again brings supply chain resilience into focus and the mitigation of risks from extended global supply chains in a world of increasing geopolitical uncertainty.”

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