The intermediate goods sector fared especially poorly, while downturns also continued at consumer and investment goods producers.
The PM edged up to 46.5 in November, from 46.2 in October. The PMI remained below the neutral 50.0 mark for the fourth month running and posted one of its lowest levels during the past 14 years.
Manufacturing production contracted for the fifth successive month, linked to reduced inflows of new business, supply chain disruptions and ongoing shortages of numerous components on international markets.
The rate of contraction was slightly sharper than in October. November also saw the total intake of new work decline, as manufacturers experienced weaker demand in both domestic and overseas markets. Subdued client confidence and high cost inflation continued to stymie efforts to raise sales volumes.
With client demand retreating, stocks of finished goods accumulated at UK manufacturers' warehouses. The rate of increase accelerated to a 43-month record. Distribution delays and intentional stock-building also contributed to the latest rise.
New export business contacted at the quickest pace in twoand-a-half years, as demand from several trading partners – including the EU, China and the US – deteriorated. Exporters reported that client hesitancy and subdued global market conditions had contributed to the decrease. Some also noted that the impact was exacerbated by issues relating to Brexit and supply chain stresses.
The deteriorating outlook for output and new orders reined in manufacturers' optimism during November. Confidence dipped to its lowest level since April 2020, amid reports of recession fears, weak consumer spending and subdued client confidence.
Manufacturers still expect production will grow over the coming year, with 44% forecasting expansion compared to only 18% anticipating a contraction. Employment fell for the second month running, with the rate of job cutting the steepest in two years. Companies linked lower staffing to the downturn in new order intakes.
Backlogs of work nonetheless fell at the fastest pace for over two-and-a-half years. Data broken down by sector showed that intermediate goods was the weakest performing product category, seeing by far the steepest drops in output, employment and new orders.
Optimism in this industry was also at its lowest since expectations data were first collected a decade ago. Consumer and investment goods producers saw output and new orders contract, but also signalled job creation and modest improvements in business sentiment.
Purchasing activity was cut back sharply during November, reflecting elevated cost pressures, weak demand and still high stock holdings at some firms. Reduced demand for inputs also lessened the pressure on suppliers. Although vendor lead times rose for the forty-first month in a row, it was to the least extent since January 2020.
Input price inflation remained above the long-run survey average, despite easing to its second-weakest since the start of 2021. A vast array of inputs were reported as up in price, although survey evidence suggested that the direct and indirect impacts of high energy prices were particularly widespread. Part of the increase in costs was passed on to clients through higher selling prices.
