UK manufacturing continued to slow in September, with exports orders falling to a 10-month low for the first time in a year.
The Markit/CIPS UK manufacturing PMI (Purchasing Managers’ Index) − calculated from data on new orders, output, employment, supplier performance and stocks of purchases − dropped to 53.4 from 53.7 in August.
‘Furthermore, order book trend was the first drop in orders for investment goods since last November, contrasting with the 15-year high rate of growth seen in the spring,’ said Rob Dobson, senior economist at Markit and author of the UK Manufactruing PMI.
‘These orders correlate closely with official data on investment spending, for which a sharp upward revision in the second quarter had raised hopes for a more sustainable-looking recovery. The PMI therefore suggests that companies have become more cautious in terms of their capital spending.’
The PMI survey showed that growth of new orders remained subdued in September. It noted that, although the rate of increase accelerated slightly over the month, it was still well below average for the current 15-month period of improvement.
While higher demand, successful promotional campaigns and the launch of new products underpinned gains in new business, the survey found some firms noted strong competition and declining export sales were restricting growth in total order book levels.
September also saw new export orders decline for the first time since July 2009. This decline was mainly felt by consumer goods producers, as levels of new export business rose in the intermediate and investment goods sectors.
The drop in sales was not restricted to the UK. According to the survey, manufactures throughout mainland Europe, the US and Russia have also reported reduced orders.