UK manufacturing sector remains subdued in September, Markit says

The Markit/CIPS manufacturing purchasing managers’ index (PMI) fell to a three-month low of 51.5 in September, down from an upwardly revised reading of 51.6, although it remained above the 50.0 no-change mark for the 30th consecutive month.

Beyond the headline reading, the trend in output growth improved slightly, taking the rate of increase to a six-month high, although it remained well short of the figures seen in the first three months of the year.

New orders slipped to the joint-slowest pace in 12 months, while the manufacturing sector registered job losses for the first time since April 2013.

Cost pressures eased up, as companies reported lower prices paid for commodities, largely thanks the slump in oil prices, leading the rate of cost deflation to its steepest since February 1999.

“Although some respite will have been felt through a sharp decrease in average input costs, the steepest in over 16 years, the generally lacklustre operating environment nonetheless encouraged firms to scale back employment for the first in two-and-a-half years,” said Markit’s senior economist Rob Dobson.

“Job cuts send a signal that manufacturers are becoming more cautious about the future, which may lead to a further scaling-back of production at some firms in coming months.”