UK manufacturing falls to lowest level for 14 months
Manufacturers were “walking rather than running” in August as new figures today showed the sector endured its worst performance in 14 months.
Amid fears that geopolitical tensions are hampering the recovery, the closely-watched CIPS/Markit purchasing managers’ index survey gave a weaker-than-expected reading of 52.5, down from 54.8 a month earlier.
The figure is still well above the 50 threshold indicating growth but the overall survey paints a picture of a broad slowdown, with inflows of new business and new export orders weakening and the pace of job creation also easing.
Markit senior economist Rob Dobson said it was increasingly evident that UK industry was not immune to the impact of the conflict between Ukraine and Russia on the UK’s biggest trading partner.
He said: “It is noticeable that where export orders were reported to have risen, companies mainly linked this to demand from North America, Asia and the Middle East, as opposed to our European partners.”
The downbeat survey will also give Bank of England policymakers more food for thought this week as they consider whether to raise interest rates for the first time in more than five years.
Mr Dobson said it now looked certain that the manufacturing sector will provide a lesser contribution to the UK economic recovery story than at the start of the year, when the headline index figure peaked at above 57.
CIPS chief executive David Noble noted that growth in output, new orders and employment all reduced to a more pedestrian level.
He said: “UK manufacturers were walking rather than running in August as the sector’s performance fell to a 14-month low and growth began to slow further.”
