UK Manufacturing Industry Suffers Steep Fall Since May 2020

BUSINESS

The manufacturing industry of the United Kingdom and new orders dropped in August 2022, falling by the most in two years amid fears regarding a worsening economy. In August 2022, the output saw its biggest contraction since the height of the pandemic in May 2020.

The index has dropped to 47.3 percent from 52.1 percent in July 2022, and the numbers above 50 generally correspond with growth, while the numbers below 50 indicate a contraction.

According to S&P Global, the companies experienced a steep downturn in new orders in August 2022, with more interest from domestic, and overseas clients decreasing heavily. This has also led to the supply of new jobs grinding to a halt, and a decrease in business optimism.

UK Manufacturing Purchase Managers’ Index (PMI) data suggests that a recession has been developing in the manufacturing industry. With more indicators in the survey, the manufacturers are the least confident regarding the 12-month outlook since April 2020.

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The demand from the critical markets like China, the European Union, and the United States was weak in August 2022, and S&P Global said that this was  exacerbated by problems with the supply chains, and logistics hubs that are a hangover from the COVID-19 pandemic and Brexit.