The slump in the UK’s manufacturing industry continued last month with output, new orders and employment all falling, according to a closely-watched survey.
Business optimism in the sector also slid to a 12-month low in December, amid client closures and high interest rates, S&P Global/CIPS UK found.
The firms’ reported that their manufacturing purchasing managers index (PMI) weakened to 46.2 in December – the 17th month in a row that it has been below a score of 50, which is the threshold for growth.
The figure is also a decline on a slight improvement in November, when the index hit a seven-month high score of 47.2.
However companies still expect production to rise, on average, in 2024, due to “sales drives and new product launches”, the survey of around 650 manufacturers found.
Rob Dobson, director at S&P Global, said: “UK manufacturing output contracted at an increased rate at the end of 2023.
“The demand backdrop also remains frosty, with new orders sinking further as conditions remain tough in both the domestic market and in key export markets, notably the EU.
“The downturn has hit manufacturers’ confidence, which dipped to its lowest level in a year, and encouraged renewed cost caution with further cutbacks to stock levels, purchasing and employment.”