TOP NEWS: Downturn in UK manufacturing continues into 2024

The UK manufacturing sector entered the new year still on a downward path, survey results showed on Thursday.

The seasonally adjusted S&P Global UK manufacturing purchasing managers’ index reading was 47.0 points in January, up from 46.2 in December but below the earlier flash estimate of 47.3.

Whilst the January score was up from the prior month, the figure remained below the 50-point no-change mark. This means the UK manufacturing sector shrank again last month.

S&P said that four out of the five PMI sub-components – output, new orders, employment and stocks of purchases – were showing trends consistent with overall contraction.

‘January saw output and new orders decline further, leading to additional job losses and cutbacks in purchasing and stock holdings. Manufacturers also experienced rising supply chain difficulties, as the Red Sea crisis led to the re-routing of input deliveries away from the Suez Canal,’ S&P Global said.

Looking ahead, UK manufacturers who responded to the survey maintained a positive outlook, despite the current downturn and persistent weakness of demand. Business optimism rose to a four-month high.

‘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,’ said Rob Dobson, Director at S&P Global Market Intelligence.

The manufacturing survey draws upon a panel of 650 firms. Responses to the survey are collected in the second half of the month.

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