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The UK manufacturing sector continued to contract in January as recession fears mount,survey results on Wednesday showed.
The seasonally adjusted S&P Global-CIPS UK manufacturing purchasing managers’ index edged up to 47.0 points in January from December’s 31-month low of 45.3 and above the flash estimate of 46.7.
With readings remaining below the 50-point no-change mark, January marks the sixth consecutive month of contraction in UK manufacturing.
S&P noted that average input costs eased to a two-month low in January, however there was a slight uptick in selling price inflation.
‘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,’ said Rob Dobson, director at S&P Global.
‘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 and across Asia is also dragging down new export wins, exacerbating the strain already caused by port delays and lingering Brexit complications.’
Looking ahead, S&P said that manufacturers’ confidence is reviving from recent lows, hitting a nine-month high. However, it noted that the mood continues to be darkened by concerns over price inflation and the possibility of recession.
‘There were some shoots of positivity developing, however,’ Dobson said. ‘Rates of contraction are generally lower than before the turn of the year, a possible sign that we may be past the worst of the downturn in industry. Cost inflation also eased further, while supply chain delays were the least pronounced for three years.’
The manufacturing PMI is compiled from responses from surveys sent to purchasing managers at around 650 UK manufacturers, with data collected between January 12 and 26.
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