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Markit survey reveals manufacturing output eased in October
Markit survey reveals manufacturing output eased in October

Markit survey reveals manufacturing output eased in October

Manufacturing output for October slowed, according to the monthly survey from IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI).

A range of conditions in the sector deteriorated in October, according to the survey; not only did the rate of activity ease, but new order inflows and employment both fell for the first time since July 2016.

The PMI which measures manufacturing output for October was recorded at 51.1, which is down from September’s revised reading of 53.6 (originally 53.8), and also down from August’s PMI of 53.0.

It is above the no-change PMI of 50.0. However, October’s rate is not far above this, which suggests some easing of activity in the sector.

This is not entirely unsurprising given the uncertainty plaguing many industries within the manufacturing sector; vehicle production has suffered and the Markit survey findings reveal that businesses are still worried about Brexit uncertainties.

Rob Dobson, Director at IHS Markit, described the latest survey as “worrying.”

He said: “October saw a worrying turnaround in the performance of the UK manufacturing sector.

“At current levels, the survey indicates that factory output could contract in the fourth quarter, dropping by 0.2%.

“New orders and employment both fell for the first time since the Brexit vote as domestic and overseas demand were hit by a combination of Brexit uncertainties, rising global trade tensions and especially weak demand for autos.”

Despite October’s manufacturing output performance, the sector remained positive regarding the rate of activity in a year’s time – due to new product launches, new capacity and export opportunities.

However, Rob Dobson once again warned of the risks Brexit factors could have on confidence and optimism.

“Looking ahead, manufacturers still maintain a positive outlook for production over the coming year, with 48% forecasting expansion.

“That said, the second half of the year so far has also seen confidence remain low compared to its long-run average, with views on prospects darkening again in October amid rising Brexit-related uncertainties and escalating global trade tensions.”

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