Britain’s factories are already in recession, despite the S&P/CIPS manufacturing PMI survey showing a slight increase in November. While the index rose to 46.5 last month from 46.2 in October, the survey remained far below the 50 point threshold that separates growth and contraction. This marked the fourth consecutive month where British manufacturing activity fell. The PMI suggests that businesses are cutting spending on manufactured goods as they brace for a slowdown in consumer demand.
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, comments: “Demand for industrial goods likely will be hit again early next year as real incomes are squeezed by the watering down of government support for energy bills and higher unemployment, as businesses are forced to consolidate costs.” The PMI also indicates that factories are pulling back on hiring plans and may even be considering reducing the size of their workforces. Manufacturers cut jobs for a second month in a row - and at the fastest pace since November 2020. The report also shows that export orders fell at the fastest pace since May 2020.
Read more: City AM
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