UK private firms signal another reduction in business activity in Nov

On a more positive note, business expectations for the year ahead rebounded from the 30-month low seen in October, it noted.

Many survey respondents commented on recession worries and increasingly challenging economic conditions, but there were fewer comments citing domestic political uncertainty.

The headline seasonally adjusted S&P Global-Chartered Institute of Procurement & Supply (CIPS) flash UK composite output index posted 48.3 in November, up only fractionally from 48.2 in October and signalling a further modest fall in private sector business activity.

The index has now registered below the crucial 50.0 no-change value for four consecutive months.

Manufacturing production (index at 45.4) continued to decline at a faster pace than service sector activity (48.8).

The latest drop in manufacturing output was the least marked since July. A number of firms noted that fewer instances of supply shortages had helped to support production volumes during November.

Companies reporting a downturn in business activity typically cited cutbacks to non-essential client spending in response to rising costs and weaker economic conditions.

Overall volumes of new work decreased for the fourth month in a row and the rate of decline accelerated to its fastest since January 2021.

Survey respondents often commented on subdued business and consumer confidence, alongside softer customer demand due to cost of living pressures and rising interest rates.

Lower volumes of new business from abroad contributed to the deterioration in order books during November, especially in the manufacturing sector.

Latest data pointed to the steepest fall in export sales among manufacturing companies since May 2020. Many survey respondents commented on Brexit-related constraints on export demand in November, in additional to the unfavourable global economic backdrop.

Strong input cost pressures continued in November and the overall rate of inflation eased only slightly since October. This was mostly driven by surging energy bills and higher wages, alongside rising import prices due to exchange rate depreciation against the US dollar.

The index measuring business activity expectations for the year ahead increased by 3.2 index points in November, and therefore, recovered around two-thirds of the loss seen during October.

ALCHEMPro News Desk (DS)