Economic Buzz: UK manufacturing PMI falls back to five-month low as downturns in output and new orders gather pace

The operating environment faced by UK manufacturers remained challenging in September, as a quiet domestic market and lower intakes of new export business stymied production volumes and total new order intakes.

The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers? Index (PMI) fell to a five-month low of 46.2 in September, down from 47.0 in August, to remain below the neutral 50.0 mark for the twelfth consecutive month.

Manufacturing production fell for the eleventh successive month in September, with the rate of contraction the fastest since March.

New order intakes subsequently fell for the twelfth month in a row, and to one of the greatest extents during the past two years.

September saw a further marked decrease in new export business. New orders from overseas clients fell at one of the quickest rates in over two years.

The current challenging operating environment filtered through to manufacturers' confidence in September, with optimism about the year ahead outlook remaining relatively subdued overall.

With both the current and future operating environments expected to remain tough, manufacturers kept a tight rein on capacity and spending during September.

Manufacturing employment fell for the eleventh consecutive month in September. Spare capacity was diverted to assist with rebuilding finished goods stocks, which rose for the first time since January.

Supply chains remained stretched in September, with average vendor lead times lengthening for the twenty-first month in a row.

Price inflationary pressures eased in September, with rates of increase in input costs and output charges both at nine-month lows.

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