Street Calls of the Week
Investing.com -- UK manufacturing conditions deteriorated further in September as the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) fell to a five-month low of 46.2, down from 47.0 in August.
The index has now remained below the neutral 50.0 mark for twelve consecutive months, indicating a sustained contraction in the sector.
Manufacturing production declined for the eleventh straight month, with the rate of contraction accelerating to the fastest pace since March. The downturn affected all major sectors, including consumer, intermediate, and investment goods.
Companies reported scaling back production in response to weaker order intakes from both domestic and export markets. New orders fell for the twelfth consecutive month, with manufacturers citing subdued client confidence, US tariff uncertainty, and high costs for energy and staff as contributing factors.
Export business saw a particularly steep decline, with new orders from overseas clients falling at one of the quickest rates in over two years. Manufacturers noted weaker demand from the US, EU, Middle East, and Asia.
The challenging environment has also impacted employment, with job losses recorded for the eleventh month in a row. Companies reported cutting full-time, part-time, temporary, and agency staff to offset rising costs, particularly following increases to the National Minimum Wage and employer National Insurance contributions.
Supply chains remained stretched, with average vendor lead times lengthening for the twenty-first consecutive month due to shipping delays, port congestion, supplier capacity issues, and material shortages.
On a positive note, price pressures eased in September, with both input costs and output charges increasing at nine-month lows. Some manufacturers also expressed hope that lean inventories combined with a potential easing of market and global trade uncertainties could boost production volumes in the coming year.
The manufacturing sector was also affected by disruptions in automotive supply chains following production shutdowns at Jaguar Land Rover due to a cyber-attack.