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Experts have said on Monday that the manufacturing sector suffered one of the worst performances in 14 years and they are “battening down the hatches” in preparation for conditions to get worse.
The sector is in a heavy contraction, the S&P Global/CIPS UK Manufacturing PMI survey climbed from 43.0 in August and in September it was 44.3, anything below 50 means it is shrinking.
Experts have said that the score means the manufacturing sector is “still among the weakest readings seen over the past 14 years.”
“The cost-of-living crisis and recent rapid rise in interest rates are taking their toll, according to producers, raising the possibility of the broader UK economy slipping back into contraction during the second half of the year,” said Rob Dobson, director at S&P Global Market Intelligence.
“The downturn is being felt throughout the manufacturing sector, with demand falling from both households and businesses.
“The resulting rise in caution at manufacturers is driving risk aversion and shifting their focus towards margin protection and cost control, highlighted by further cuts in employment, purchasing and inventories.
“These all point to companies battening down the hatches in expectation of stormy conditions ahead.”
Dr John Glen, chief economist at the Chartered Institute of Procurement & Supply, said: “There are some small shoots of good news for those looking for grounds for optimism.
“The drop in demand gave manufacturers space to work through backlogs and build up capacity, while the easing of pressure on supply chains resulted in an improvement in the average supplier delivery times.
“As the Conservative Party gathers in Manchester this week, the manufacturing sector will be looking for policies that can restore business and consumer confidence and help drive back demand.”
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