UK PMI Manufacturing data was finalized at 44.8 in October, marking a modest improvement from September’s 44.3. However, the report by S&P Global underscores some concerning aspects: declining output, a drop in new orders, and shrinking employment. Furthermore, business optimism has plunged to a ten-month low.
Rob Dobson, Director at S&P Global Market Intelligence, underscored the severity of the situation. “The UK manufacturing downturn persisted at the outset of the final quarter, exacerbating the economy’s flirtation with recession,” he said.
“The ongoing contraction in production for eight straight months, the longest since the 2008-09 period, is primarily due to subdued domestic and international demand, resulting in a continued downturn in new order intakes.”
Dobson highlighted the skewed risks towards a negative outlook, with businesses’ growing caution leading to employment cuts, reduced purchasing, and lower inventory levels.
Although there’s a silver lining with a slight ease in input prices and output charges, Dobson warned that this faint inflation relief comes with an increased risk of recession, stemming from the prevailing weak demand.