Tough operating environment for UK manufacturing in Aug: S&P Global

The downturn in production volumes extended into its tenth successive month.

The seasonally-adjusted S&P Global UK manufacturing purchasing managers’ index (PMI) posted 47 in August, down from July's six-month high of 48, but below the neutral 50 mark for the eleventh month in a row.

Production volumes showed comparative resilience in August. Although the downturn in output continued, the rate of contraction was marginal and only slightly steeper than in the prior survey month, S&P Global said in a release.

Modest declines were seen in the consumer and investment goods industries, while output rose marginally at intermediate goods producers for the second successive month.

The main factor underlying manufacturing sector weakness was a slump in new work intakes. New orders contracted at the fastest pace in four months and to one of the greatest extents seen over the past two years.

Domestic demand remained weak and new export business contracted for the forty-third successive month. The steepest drop in new export orders was in the intermediate goods sector, where overseas orders fell to the greatest extent in two years.

Declines were also signalled at investment and consumer goods producers, with the rate of decline marked in the former but comparatively mild in the latter.

The outlook for the UK manufacturing sector remained relatively mixed in August. Although business optimism among manufacturers rose to a six-month high, it was still below its long-run series average.

Tough current conditions combined with an uncertain outlook led to further cutbacks to employment, input buying and stock holdings. Job losses were registered for the tenth consecutive month.

ALCHEMPro News Desk (DS)