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July 2023 - Industrial

UK Manufacturing sector has shrunk for 13 straight months: A survey by S&P Global and the Chartered Institute of Procurement & Supply (CIPS)has revealed that the UK manufacturing sector has shrunk for 13 straight months, and at the fastest rate since the early days of the Covid-19 pandemic, in the last month.

According to the S&P Global/CIPS UK Manufacturing PMI survey the survey's reading fell by 2.7 points between July and August, from 45.3 to 43.0.

The last time the survey was this low was 39 months ago at the start of the global pandemic, and prior to that levels have not been so low since the financial crisis of 2009, according to the data.

However, despite the disappointing forecast of 43.0, this figure was better than the 42.5 predicted by experts. To add to this three have been more signs than concerns around rising inflation is easing and the costs that manufacturers have face have fallen for the 4th consecutive month and at a faster rate than any point since January 2016.

Rob Dobson, director at S&P Global Market Intelligence said:

"The ‘plus’ side of the downturn is that input costs are now falling at the quickest pace since January 2016 and inflationary supply chain issues are abating, which should help feed through to lower goods price inflation in the coming months.

“The survey data therefore suggest policymakers will become increasingly focused on concerns over the economy’s health as they mull the need for further rate hikes."

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