UK manufacturing suffers surprise downturn
A manufacturing sector that 'lost considerable momentum during February' and is cutting jobs at the fastest rate for more than three years has raised concerns that weak demand at home and abroad will cause it to go on struggling.
Fresh data on the sector's health comes from February's Markit/CIPS Purchasing Manager's Index (PMI), which has slipped below the neutral 50.0 mark, the first sub-par reading since last November. The PMI recorded 47.9, down from January's 50.5.
Output, new orders and employment all posted net reductions since January. Purchasing activity was also cut markedly, as manufacturers continued to signal a preference for lower stock holdings.
Chris Williamson, chief economist at survey compiler Markit, said the return to contraction of the manufacturing sector was a big surprise and represented a major set-back to hopes that the UK economy could return to growth in the first quarter, thus avoiding a triple-dip recession.
"The data so far this year points to manufacturing output falling by as much as 0.5%," noted, "meaning a strong rebound is needed in March to prevent the sector from acting as a drag on the economy as a whole in the first quarter."
EEF chief economist Lee Hopley said the latest PMI data was 'disappointing' and, despite mitigating circumstances, there was "no denying that underlying momentum in the sector remains weak".
