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There has been a four month low in May as the manufacturing sector has seen a downturn as post-Brexit trade checks has weakened overseas demand.
S&P Global/CIPS UK Manufacturing PMI survey has showed a reading of 47.1 May which is down from 47.8 which was seen in April and a score under 50 means the sector is shrinking.
For the last 10 months the manufacturing sector has been in negative territory as new orders have plummeted due to a prolonged fall in demand.
Rob Dobson, director at S&P Global Market Intelligence said, “Manufacturers are finding that any potential boost to production from improving supply chains is being completely negated by weak demand, client de-stocking, and a general shift in spending in the UK away from goods to services.”
Dobson added, “Although near-term conditions remain challenging overall, manufacturers are still finding reasons for optimism, including brighter news on the price and supply fronts.
“Average input costs fell for the first time in three-and-a-half years, allowing some firms to maintain efforts to repair and protect margins damaged by a long and often severe period of cost inflation.
“The recent healing in global supply chains is also continuing apace, with lead times shortening to a near record extent in May.”
However, Dr John Glen, chief economist for CIPS (Chartered Institute of Procurement & Supply) warned that customers in Europe have grown “tired of additional administrative Brexit checks.”
Dr Glen said that the decline in orders from the EU also “demonstrated that customers from overseas [had become] tired of additional administrative Brexit checks.
“The fear around near shoring goods became a reality and the fall in overseas interest was the fastest since January.”
The chief economist for the CIPS added, “More interest rate rises increasing business costs and the pressure from stubborn inflation will continue to keep business owners awake at night.
“The threat of recession narrowly missed at the end of last year hasn’t passed entirely so businesses will be tightening their belts for lean times to come which could include more job shedding and reduced operations
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