Manufacturing activity “out of steam”, warns Markit

UK manufacturing activity has fallen to its lowest level since June 2009 while all eurozone countries saw contraction last month, according to recent economic surveys.

The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.6 points in November, down from a revised 47.8 in October.

A reading below 50 indicates that activity is contracting and the latest index adds to concerns that the UK economy is on the brink of falling into another slowdown over the opening months of 2012.

Rob Dobson, senior economist at Markit, says: “The manufacturing engine has run out of steam. Output is falling at the fastest rate since early 2009 as order inflows from domestic and overseas markets continue to deteriorate.

“Jobs are consequently being lost at the fastest rate for over two years as producers seek to scale back operating capacity in line with a darkening economic outlook.”

The Markit Eurozone Manufacturing PMI for November stood at 46.4 points, declining from 47.1 in the previous month to its lowest level since July 2009.

All countries covered by the index saw their manufacturing activity remain in contraction over the month, with the pace of decline increasing in Austria, France, Germany, Ireland, the Netherlands and Spain.

The PMIs for Greece and Italy managed to rise in November, although the countries are still some of the weakest performers overall in spite of the marginal improvement.

Chris Williamson, chief economist at Markit, says: “It was the first month since mid-2009 that all countries saw output fall, highlighting the broadening-out of the downturn from the periphery to the core.”

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