UK factories also had a troubling start to the summer, matching the gloomy picture across Europe and in Asia.



British manufacturers suffered their first drop in output in over two years in July, as new orders and fresh export business both continued to decline.

Companies were hit by weaker market demand, difficulties in sourcing components and transportation delays, as well as a drop in new business.

This pulled the manufacturing PMI to a 25-month low, as activity growth slowed.

Firms blamed a drop in new orders on the cost of living crisis, weak domestic demand, client uncertainty, warmer-than-usual weather and lower intakes of new export business.

Foreign demand fell for the sixth month in a row, amid reports of weaker inflows from mainland Europe (partly due to post-Brexit issues), the USA and China.

“The UK manufacturing sector shifted into reverse gear at the start of the third quarter. Output contracted for the first time since May 2020, as new order intakes suffered the first back-to-back monthly decreases for two years. Rising market uncertainty, the cost of living crisis, war in Ukraine, ongoing supply issues and inflationary pressures are all hitting demand for goods at the same time, while lingering post-Brexit issues and the darkening global economic backdrop are hampering exports. “With the Bank of England implementing further interest rate hikes to combat inflation, the outlook is beset with downside risks. With this in mind, the continued low degree of optimism among manufacturers is of little surprise.

There was one bright note - job creation accelerated as companies addressed staff shortages.

Source: The Guardian

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