Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Manufacturing sector rebound hopes dashed

 

Graeme Evans
Monday 01 October 2012 13:28 BST
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

Hopes of an imminent rebound in the manufacturing sector were dashed today as the crisis in the UK's largest export market continued to hit orders.

The latest Markit/CIPS purchasing managers' index (PMI) produced a headline reading of 48.4 for September, below the 50 mark that separates expansion from contraction and down on the improved trend of 49.6 seen a month earlier.

After an initial rebound since activity was hit by the extra holiday for the Queen's Diamond Jubilee in June, Markit economist Chris Williamson said the findings were consistent with manufacturing output falling at a quarterly rate of more than 1% in September.

He said: "At that pace, the sector could dampen economic growth severely and keep the economy in recession."

A bright spot in the survey was an uplift in growth of new orders to the highest level since March, helped by an improvement in domestic demand.

But the overall increase was only modest due to falling exports as overseas sales continue to be hit by the ongoing deterioration in global economic growth, driven by the ongoing crisis in the eurozone.

Mr Williamson added: "In this global economic environment, manufacturers look certain to struggle and the sector is unlikely to act as a driver of economic growth."

Cost pressures also surged in September, reflecting rising oil and agricultural commodity prices in particular.

The CIPS survey said staffing levels fell for the fifth successive month, with companies blaming the steepest rate of reduction since November on tough market conditions, lower production and the presence of spare capacity.

Backlogs of work fell for the 20th month in a row, the survey added.

Samuel Tombs, an economist at Capital Economics, said the sharp fall in the employment balance, indicating that manufacturers have picked up the pace of job-cutting, was "a tentative sign that the resilience of employment in the first half of the year might be starting to fade".

He added: "Today's economic data presented a uniformly weak picture of economic activity and will therefore go some way to dampening hopes that the 'green shoots' of recovery are emerging."

PA

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in