Manufacturing suffers worst month since the depths of the pandemic

Manufacturers suffered a grim end to the year as the sector experienced its worst month since the depths of the pandemic.

The closely watched S&P Global purchasing managers’ index (PMI) showed that the sector shrank for the fifth month in a row in December.

The decline was blamed on weak demand from customers in the UK and overseas amid higher costs, market volatility and Brexit-related complications.

The figures, which heralded the start of what threatens to be a bleak year ahead, came at the same time as PMI readings for the US and China, which also made for gloomy reading. 

The UK reading of 45.3 –on a scale where the 50 mark separates growth from contraction – was down from 46.5 in November, the lowest since May 2020. 

Stripping out Covid, it was the worst month since May 2009 and adds to the likelihood that the economy shrank at the end of 2022, plunging the UK into recession. 

The manufacturing downturn means job cuts – which have hit their worst level since October 2020, according to the report.

The US PMI reading of 46.2 was the worst since May 2020 as output and orders from customers cooled further. 

In China, the Caixin/Markit manufacturing PMI reading for December fell to 49.0, a fifth straight month of contraction.