UK's Sept private sector output falls; manufacturing production drops

A slower decrease was seen in UK manufacturing production. Input price inflation, meanwhile, saw its largest monthly fall so far this year, despite widespread reports citing pressure on costs from higher fuel bills.

A combination of weak demand and lower cost inflation contributed to the slowest increase in average prices charged by private sector companies since February 2021.

The headline seasonally adjusted S&P Global/CIPS flash UK composite output index registered 46.8 in September, down from 48.6 in August, to signal the fastest reduction in output since the lockdown period in January 2021.

Aside from pandemic disruptions, the latest drop in private sector business activity was the steepest since March 2009.

Some manufacturers suggested that customer destocking had acted as a brake on their output requirements.

Total new work across the private sector economy decreased for the third consecutive month in September, although the rate of decline moderated fractionally since August amid a slower drop in manufacturing order books, S&P Global said in a release.

Nonetheless, there were encouraging signals in relation to domestic inflation trends, according to the survey’s measures of input costs and prices charged. September data pointed to the slowest rise in private sector business expenses since January 2021, although the index was still historically elevated.

Higher fuel bills and strong wage pressures were still widely reported, but this was counterbalanced by the pass through of falling commodity prices by suppliers of raw materials. Finally, average prices charged by private sector companies increased at a robust pace in September.

ALCHEMPro News Desk (DS)