2023.12.0113:39:00UTC+00UK Manufacturing Downturn Eases In November

The downturn in British manufacturing activity softened in November as output and new orders fell at slower rates, survey results from S&P Global revealed?Friday.

The Chartered Institute of Procurement & Supply Manufacturing Purchasing Managers' Index, or PMI, rose to a seven-month high of 47.2 in November from 44.8 in October. The flash estimate was 46.6.

However, any reading below 50 indicates contraction in the sector.

All PMI components, namely new orders, output, employment, suppliers' delivery times, and stocks of purchases, remain in contraction in November, though to lesser extents than in the prior survey month.

Firms scaled back production levels in November, linked to weaker domestic demand, decreased intakes of new export business, and destocking at both manufacturers and their clients.

Total new orders declined for the eighth successive month, and the fall in export demand continued its stretch to 22 straight months.

Weaker demand in November was largely attributed to a combination of client destocking, lost customers, market uncertainty, budget constraints, and lower inflows of new work from both the public and private sectors.

Strong international competition weakened sales to different overseas markets, including mainland China, Europe, and the US, which caused an impact on new export business.

Considering efficiency gains and cost minimization, firms reduced the levels of employment, input purchasing, and stocks in November.

On the price front, input prices continued to fall in November amid cheaper costs for chemicals, energy, food products, metals, packaging, paper, plastics, pulp, and timber. Meanwhile, goods producers increased their selling prices fractionally as part of efforts to repair margins.

"In stark contrast, optimism for the next 12 months showed a slight uplift as businesses hoped a new year could bring more stability and growth", Dr. John Glen, chief economist at CIPS, said.

"However, other areas of concern include reduced spending on stock and operational capacity as rising job losses signalled more difficult times ahead."