Manufacturing activity fell even more rapidly in the wake of the Brexit vote than first expected, according to the latest survey snapshot of the sector.
The Purchasing Managers’ Index produced jointly by the data firm IHS Markit and the Chartered Institute for Procurement and Supply stood at 48.2 in July, below the 50 point that separates growth from contraction. This is also lower than the 49.1 “flash” estimate that they produced on 22 July.
The reading implies the fastest rate of contraction in UK manufacturing activity since February 2013.
Employment decreased for the seventh straight month in July and the rate of job loss was the second-fastest for almost three-and-a-half years, Markit/CIPS said. Firms attributed this to the decline in output and new orders.
The index from fresh orders dipped to 48.3, its lowest in three years.
David Noble of CIPS said the industry – which accounts for around 10 percent of UK GDP – had taken a “backwards leap” since the 23 June vote to leave the European Union.
“Though these falls were not as marked as those seen during the Great Recession in 2007-2008 the drop was harsher than expected…Without new orders coming through, this downward trajectory is likely to get worse, at least in the short term.”