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The º£½ÇÊÓƵ's manufacturing sector has seen its activity drop to a fourteen-month low, according to a new survey. This is due to lower demand and weak confidence within the industry.

The S&P's manufacturing purchasing managers' index (PMI) revealed that downturns have deepened as firms prepare for changes in the Government's budget, as reported by .

The PMI fell to 46.9 from 47.0 in January, which was then the lowest level in 11 months.

Despite beating the 'flash' estimate of 46.4, the PMI showed that the downturn led to the most significant job losses since mid-2020. All three sectors - consumer, intermediate, and investment goods - experienced reductions in production and new orders, with the consumer goods sector being the worst affected.

Employers brace for national insurance hike

S&P stated that the latest round of job cuts was due to "weak demand, cost control initiatives and restructuring in response to changes in both the minimum wage and employer national insurance contributions". Companies reacted to the worsening downturn by laying off staff, reducing hours, making redundancies, and not replacing those who left or retired.

The recent data showed that staffing levels have fallen in five out of the past six months.

Rob Dobson, Director of Global Market Intelligence at S&P, commented: "Weak demand, low client confidence and rising cost pressures are accelerating the downturns in output and new orders, while the Autumn Budget's changes to the national minimum wage and employer NICs are driving up inflation fears and intensifying the downward trend in staff headcounts."

He added, "The pace of manufacturing job losses is currently running at a rate not seen since the pandemic months of mid-2020."