A closely followed gauge of UK manufacturing remained stuck at a six-and-a-half-year low in July as a downturn in the sector continued at the start of the third quarter, according to fresh figures from IHS Markit.
At 48.0 in July, unchanged from June, the headline seasonally adjusted IHS Markit/CIPS Purchasing Managers’
Index stayed below the neutral 50.0 mark for the third straight month, IHS said in the report. The pound weakened to $1.2100, down 0.50% early on Thursday, extending its recent depreciation against the dollar to the lowest level since early 2017.
The last time that the index was below its current level was in February 2013, with production and new orders shrinking as manufacturers faced the ongoing headwinds of political uncertainty, a global economic slowdown and the unwinding of stocks built prior to the original Brexit date, March 29.
Manufacturing production fell to the greatest extent in seven years, as companies scaled back output in response to a further “solid” decrease in new order intakes. Demand was weaker from domestic and overseas markets. The decline in new export business mainly reflected lower intakes from the European Union and China.
“A killer combination of economic uncertainty and the weakest production levels for seven years, battered
the manufacturing sector into contraction for the third consecutive month in July,” Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said in the report.
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