Manufacturing stuck in mire despite boost from Brexit goods stockpiling
Britain’ s manufacturing sector has been dealt a blow after suffering its longest losing streak in seven years, according to a closely-watched report.
The sector, which accounts for just over 10 per cent of the economy, scored 49.6 in October, on the IHS Markit/cips purchasing managers’ index (PMI). Any reading below 50 denotes contraction.
However, as businesses ramped up their stock-building ahead of the since-abandoned 31 October Brexit deadline, the latest figure came in above September’s 48.3. This means the rate of contraction eased slightly.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “A minor uplift in overall purchasing activity did little to ease the agony for manufacturing companies in October as the sector remained submerged in contraction terrain and heading for recession.”
Exporters had some reason to cheer as overseas sales improved, albeit mildly. For the first time in seven months the UK’S new export business rose as EU customers bought the British goods they would need after the UK left the bloc.
Andy Hall, head of corporate banking, Central Scotland, at Barclays, said: “Top of UK manufacturers’ Christmas wish list this year has to be an end to the Brexit uncertainty that has continued to thwart their investment intentions and stifle performance throughout the year.
“Subtract the minor uplift in purchasing activity in October, courtesy of stockpiling, add in falling demand from both home and overseas markets and it’s not hard to see why sentiment in the sector is low, with falling car production indicative of the issues being faced.
“Until that wish is granted, manufacturers need to get on with influencing the factors within their powers.”