UK manufacturing activity slumps to lowest levels since 9/11
Manufacturing in the UK sees a sudden slump in the wake of weakening demand and soaring costs.
The Chartered Institute of Purchasing and Supply's (CIPS)/Markit manufacturing index fell to 45.8 – the lowest since December 2001 and a sign of industry contraction, with a score above 50 signalling growth.
Firms in the sector scaled back production to an extent not seen since December 1998 as they continued to struggle with a combination of soaring input costs from oil and food products and weakening demand.
Manufacturing jobs were also axed at the fastest pace since August 2005 as firms looked to cut costs, the survey showed.
Roy Ayliffe, CIPS's director of professional practice, said the industry saw levels of contraction "not seen since the immediate post-9/11 period".
"Faced with a relentless onslaught of ever weaker domestic demand, slower global economic growth and record cost inflationary pressure, manufacturers scaled back production, which contracted at the most severe levels in nearly a decade," he said.
The sector was also hit by falling order books as clients postponed expenditure, while export orders also went into reverse – falling from 51.1 in May to 47.4 last month despite a weaker pound as slower economic growth affected sales to markets including China, France and the US.