Business

Weak demand shrinks UK manufacturing sector in November

Manufacturing
Image caption The figures follow a gloomy Autumn Statement by the chancellor

The UK's manufacturing sector shrank in November at its fastest pace in 18 months as global demand weakened, a survey has indicated.

The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) fell to 47.6 in November, its lowest level since June 2009, from 47.8 in October.

A fall in orders and the eurozone debt crisis forced companies to cut jobs.

An index reading of 50 or above indicates growth, with a below 50 reading suggesting decline.

Rob Dobson, senior economist at Markit, said: "The manufacturing engine has run out of steam.

"Output is falling at the fastest rate since early 2009 as order inflows from domestic and overseas markets continue to deteriorate."

He added that the economic outlook was "darkening".

This week the chancellor delivered his Autumn Statement, a report that forecast deeper cuts, higher job losses and weaker growth in the coming years.

The Office for Budget Responsibility revised down its growth forecast for next year from 2.5% to 0.7%.

However, the PMI survey contained one glimmer of better news.

It showed input prices fell in November for the first time since July 2009, giving some room for manufacturers to raise profit margins.

Their own prices increased by the smallest margin since October 2009.

Orders were down, not only from the eurozone, but from the US and Asia as well.

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