Factory production in UK, orders shrink at fastest since 2020

UK manufacturing output and new orders fell in July, the sharpest since May 2020, as factories across Europe grappled with rising costs and slowing demand, a survey showed on Monday.

The S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell last month to 52.1 from 52.8 in June, revised down slightly from a July flash read of 52.2.

The drop would have been larger had the survey’s employment index not been revised upwards.

The indicators of the survey for production and new orders fell sharply, reaching the lowest level since the beginning of the Covid-19 pandemic, which led to a widespread shutdown of the economy.

A Lloyds Bank survey of businesses released on Friday also showed that manufacturers have been hit hard by rising inflation.

“The decline in total new orders was associated with the cost of living crisis, weak domestic demand, customer uncertainty, warmer-than-usual weather and lower inflow of new export business,” said survey compiler S&P Global.

Export orders also fell, partly due to Brexit issues, S&P Global said.

Manufacturers’ input and output prices rose at the slowest pace in over a year, which may reassure Bank of England officials about the extent of inflationary pressures in the economy.

Economists are increasingly expecting the BoE to hike rates by 50 basis points instead of 25 basis points on August 4 to prevent the recent surge in inflation to 9.4% from seeping into the economy.

https://www.independent.ie/business/world/uk-factory-output-orders-shrink-at-fastest-pace-since-2020-41881851.html Factory production in UK, orders shrink at fastest since 2020

Fry Electronics Team

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