Factories in 4-month slump as export orders plummet

Everything from rising costs and supply chain issues to weaker demand from customers abroad were blamed. And manufacturers’ confidence fell to the lowest since April 2020.

The research comes from S&P Global and the Chartered Institute of Procurement and Supply (CIPS), which measures the health of the sector using an index. Anything above 50 shows it is growing.

Last month’s 46.5 reading was up slightly on October but one of its lowest for 14 years.

Dr John Glen, chief economist at CIPS, said: “A lethal cocktail of Brexit, logistics constraints, high costs and low demand contributed to the continued decline in manufacturing output in November.”

New export business contracted at the quickest pace in two-and-a-half years.

“Exporters reported that client hesitancy and subdued global market conditions had contributed to the decrease,” said the research.

Rob Dobson, director at S&P Global Market Intelligence, added: “The trend in new export business was especially weak, as Brexit issues and supply chain stresses exacerbated the effects of a weakening global economic backdrop, leading to lower sales from the United States, the EU and China.”

With new work falling, factories saw finished goods beginning to stack up.

It also led to factories cutting staff numbers at the fastest rate for two years.

Input price inflation – what firms pay for raw materials and the like – remained above the long-run survey average.

James Brougham, senior economist at the manufacturers’ trade organisation Make UK, said: “In the past year, demand has shielded industry from the worst of the fallout brought about by high inflation, soaring energy costs and staff shortages but this protective shield is now clearly ebbing away fast.”

“As new orders dry up, so too does the cash flow that has allowed companies to operate in such a hostile environment.”

He added: “There is clearly a long winter ahead as those businesses that haven’t moved into a battle footing yet soon will.”