Downturn in manufacturing eases as new figures show four-month high

 

The downturn in UK manufacturing showed signs of easing today after new figures revealed a rebound from July's “disastrous” performance.

The latest Markit/CIPS purchasing managers' index (PMI) produced a headline reading of 49.5 for August, representing a four-month high and only slightly below the 50 mark that separates expansion from contraction.

The survey contrasts with the findings of the EEF manufacturing organisation, which today said firms were facing the toughest conditions in nearly three years as the sector struggles against headwinds from the eurozone.

CIPS chief executive David Noble said a repeat of the previous month's performance would have been unthinkable: "We can take consolation from August's figures in that they were less bad than the disastrous month before. We have witnessed a return to the status quo of flat growth in a fragile economy."

With the figure better than City expectations and other eurozone countries, ING economist James Knightley said one-off factors such as the Olympics and the delayed effects of the Diamond Jubilee may have influenced the result.

He added: "The report is consistent with stagnation in the UK's manufacturing sector rather than the deepening recession hinted at by official data."

The figure of 45.2 for July, which followed readings of 48.6 and 45.9 in June and May respectively, was blamed on a "perfect storm" of wet weather, weak confidence and the continuing eurozone crisis.

In August, manufacturers were able to raise their average selling prices in a bid to recover some of the margins lost earlier in the year.

However, the rate of inflation was only modest as strong competition and weak demand restricted the pricing power of a number of firms.

Input costs also declined for the third month running during August, reflecting lower metal and plastic prices.

Labour enterprise spokesman Iain Wright said: "Today's report from the EEF is a worrying indication of the impact of the recession on British manufacturing. George Osborne's promise of a 'march of the makers' rings hollow.

"By cutting spending and raising taxes too far and too fast, the Tory-led Government has undermined the potential of UK manufacturers to lead the economy into recovery.

"We need a long-term industrial strategy which helps British manufacturing achieve its potential as the most creative and innovative sectors anywhere in the world."

PA

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
theatreSinger to join cast of his Broadway show after The Last Ship flounders at the box office
News
Valerie Trierweiler’s book paints Hollande as a cold-hearted hypocrite
people
Arts and Entertainment
Jennifer Lawrence as Katniss Everdeen in The Hunger Games: Mockingjay Part 1
filmsMockingjay Part 1 taking hit franchise to new levels
News
Bill Cosby
peopleActor has firmly defended himself against all claims
Arts and Entertainment
Carey Mulligan as Bathsheba Everdene in Far From The Madding Crowd
filmsAlso much to look forward to for Thomas Hardy fans
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Clinical Negligence Solicitor

Highly Competitive Salary: Austen Lloyd: HAMPSHIRE MARKET TOWN - A highly attr...

Ashdown Group: IT Systems Analyst / Application Support Engineer (ERP / SSRS)

£23000 - £30000 per annum + pension, 25days holiday: Ashdown Group: An industr...

Ashdown Group: Junior Reports Developer / Application Support Engineer

£23000 - £30000 per annum + pension, 25days holiday: Ashdown Group: An industr...

Recruitment Genius: Client Support Officer

£10 - £11 per hour: Recruitment Genius: The candidate must be committed, engag...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible