Weakest rating since 2009 for Markit/CIPS Manufacturing PMI

At 49.1 in July, down from a revised reading of 51.4 in June, the seasonally adjusted Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) posted its weakest reading since June 2009.

Output is said to have risen marginally in July, with the rate of expansion the least marked in the current 26-month period of growth. Underlying the slowdown was a reduction in the level of new orders received.

According to Markit/CIPS UK Manufacturing PMI, new business declined for the second time in the past three months and at the fastest pace for more than two years. This mainly reflected lacklustre domestic market conditions, as levels of new export business rose for the 10th straight month. Companies reported improved sales to Australia, China, East Asia, New Zealand and the US.

Manufacturing employment declined slightly in July, representing a marked turnaround from the record jobs growth seen five months earlier.

Backlogs of work continued to fall, despite the reduction in staffing levels. Companies reported that weaker inflows of new work freed up capacity to divert towards progressing existing contracts.