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UK manufacturing in July suffers its biggest drop in 3 years post Brexit
THE UK's manufacturing contracted in July, with Markit Economics' Purchasing Managers' Index falling to 48.2, below the one-off flash reading of 49.1. The index was at 52.4 in June.
The index has only dropped below the 50 mark, which separates expansion from contraction, one other time since early 2013, reported Bloomberg.
The data suggests that the UK's vote to exit the European Union may have a harsher impact on the economy than initially expected. Markit's flash estimates published last month had already signalled that business activity was shrinking at its fastest pace since the last recession seven years ago.
Economist Rob Dobson at Markit said: "The downturn was felt across industry, with output scaled back across firms of all sizes and across the consumer, intermediate and investment goods sectors."
The drop in production was the steepest since October 2012, Markit said. New orders also contracted, suggesting uncertainty in the domestic market offset any boost to exports from the weaker pound.
While manufacturing exports were the only bright spot in the initial report, Markit said that the improvement was "less marked than previously estimated" due to sluggish overseas demand. The drop in the currency pushed input-cost inflation to a five-year high.
Employment declined for a seventh month in July, with companies linking lower staffing to the fall in output and new orders.
The index has only dropped below the 50 mark, which separates expansion from contraction, one other time since early 2013, reported Bloomberg.
The data suggests that the UK's vote to exit the European Union may have a harsher impact on the economy than initially expected. Markit's flash estimates published last month had already signalled that business activity was shrinking at its fastest pace since the last recession seven years ago.
Economist Rob Dobson at Markit said: "The downturn was felt across industry, with output scaled back across firms of all sizes and across the consumer, intermediate and investment goods sectors."
The drop in production was the steepest since October 2012, Markit said. New orders also contracted, suggesting uncertainty in the domestic market offset any boost to exports from the weaker pound.
While manufacturing exports were the only bright spot in the initial report, Markit said that the improvement was "less marked than previously estimated" due to sluggish overseas demand. The drop in the currency pushed input-cost inflation to a five-year high.
Employment declined for a seventh month in July, with companies linking lower staffing to the fall in output and new orders.
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