The manufacturing sector is bracing for a deeper downturn as a new survey reveals that activity has dropped to its lowest level in nine months.
The purchasing managers’ index (PMI) from S&P, which measures industry-wide activity, fell to 48.0 in November, down from 49.9 in October and below the earlier ‘flash’ estimate of 48.6, as reported by .
This marks the second consecutive month where the PMI has registered below the neutral mark, sparking fears of another contraction in the sector. Rob Dobson, director at S&P Global Market Intelligence, attributed the struggle in manufacturing to high costs, weak demand and concerns over the economic outlook.
READ MORE: {}
The survey also indicated that the government’s tax hikes have led firms to reassess budgets, impacting investment and leading to further job cuts. According to S&P, the rate of job losses in November was the fastest since February, with cuts linked to worries over increasing cost pressures.
Dobson warned that the tax hikes are likely to "raise costs further in 2025". Mike Thornton, national head of manufacturing at RSM 海角视频, echoed these concerns, stating: "There is a noticeable dip in the employment index...with many businesses likely pausing recruitment efforts due to the anticipated financial strain," Meanwhile, overseas demand for British goods declined for the 31st consecutive month, with falling demand in the US , China and the EU.
Smaller businesses have been particularly affected, experiencing significant drops in output, new orders and export business. Despite the challenges of rising costs and weak demand, business confidence has remained relatively stable.
The survey revealed that 52 per cent of firms anticipate an increase in production over the next year, while only 11 per cent foresee a contraction. Factors such as product launches, planned expansions and hopes for economic recovery have helped maintain confidence levels.
November also saw a rise in input inflation due to increased costs for chemicals, energy, food, paper and timber. Other factors contributing to the price pressure include higher freight costs, raw material shortages and the Red Sea crisis.