UK factory downturn intensifies in December, S&P Global says

The downturn in UK manufacturing accelerated at the end of 2022, but by less than initially thought, the results of a closely followed survey revealed.

S&P Global's UK manufacturing sector Purchasing Managers' Index for December printed at 45.3 for December.

That was down from November's reading of 46.5 and marked a fifth consecutive month in contractionary territory, but came in above the preliminary estimate of 44.7.

Production was down for a sixth month in a row with the rate of decline among the steepest seen in 14 years.

Companies blamed declines in output on falling intakes of new work and disruptions from stretched supply chains and material shortages.

Incoming business registered a similarly steep decline during the month, according to the survey compiler.

The drop reflected weaker demand both domestically and overseas, economic uncertainty, client destocking and customers postponing orders.

Employment in the sector meanwhile fell for a third month and at the fastest clip since October 2020.

"There was slightly better news on the inflation front, as rates of increase in input prices and factory selling prices both slowed further in December," said Rob Dobson, director at S&P Global Market Intelligence.

"However, as this is mainly just the result of weakened demand reducing supply imbalances it is unlikely to provide much real respite for manufacturers and their operating margins as they head into what looks like being a difficult 2023."