Home Business News Manufacturing slumps to six month low as demand plummets

Manufacturing slumps to six month low as demand plummets

by LLB staff reporter
3rd Jul 23 12:29 pm

The manufacturing sector has slumped to a six month low as overseas demand plummets.

S&P Global/CIPS UK Manufacturing PMI survey found that input costs fell to the sharpest rate in seven years and showed a reading of 46.5 in June, compared to 47.1 in May.

A score below 50 means that the manufacturing sector is shrinking and the PMI survey has shown a negative reading for a straight 11 months.

The sector is seeing a continued downturn as order levels and employment in June contracted even though supply pressures and demand are all showing signs things are starting to ease.

Rob Dobson, director at S&P Global Market Intelligence, said, “The UK manufacturing sector continued to report recessionary conditions in June.

“Producers are being hit by weak domestic and export market conditions with clients showing a greater reluctance to commit to spending due to market uncertainty, increased competition and elevated costs.”

In June backlogs had eased and waiting times in the supply chain had shortened which the survey found was a welcome improvement.

Dobson said that the factors “remain a symptom of the current weakness of demand faced by the sector and are therefore unlikely to play a role in boosting production moving forward.”

He added, “Manufacturers therefore remain in defence mode, looking to cut back spending on purchasing and employment wherever possible and release capital tied up in stocks.”

Glynn Bellamy, the UK head of industrial products for KPMG, added, “That drying up of new work from domestic and export markets, along with continued destocking, is holding back UK manufacturing output – threatening jobs and investment.”

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