UK factory production "falls at the fastest pace in seven years"

Activity in the UK's manufacturing sector fell at the fastest pace in seven years in August, a closely monitored investigation has suggested.

Uncertainty surrounding Brexit and the global economic downturn were some of the factors affecting firms, according to the IHS Markit / CIPS survey.

The Purchasing Leads Index (PMI) produced by IHS Markit / CIPS dropped to 47.4 in August, down from 48 in July.

A figure below 50 indicates that the sector is contracting.

New orders fell at the fastest pace in seven years, and business confidence dropped to the lowest level since the survey first began to track the measure in 201[ads1]2. [19659005] "High levels of economic and political uncertainty coupled with ongoing global trade tensions stifle the results of the UK manufacturers in August, "said Rob Dobson, director at IHS Markit.

"The global economic downturn was the main factor ghing new work received from Europe, the United States and Asia.

" There was also a further impact from some EU-based customers directing supply chains away from the UK due to Brexit . "

The UK economy fell 0.2% in the second quarter of the year – the first time it has shrunk since 2012.

If the economy recedes in the current July period by September, it will be considered to be in a downturn as it will have shrunk for two consecutive quarters.

Mr Dobson said the results of the PMI survey suggested that the industrial sector – which accounts for around 20% of the UK economy – contracted for a quarterly pace of "close to 2%".

Howard Archer, chief financial adviser to the EY Item Club, however, said it could be too pessimistic.

"With the CIPS surveys that tended to be too sensitive to political uncertainty and car manufacturers maintaining production in August (after bringing their annual summer shutdowns forward this year), the sector's results are unlikely to be so bleak, "he said.

"But with global and domestic headwinds showing no signs of relief, the rest of 2019 is set to remain a difficult period for manufacturers."

Andrew Wishart, British economist at Capital Economics, said that while the recent PMI survey was weak, "we still doubt that the industry will pull the economy as a whole into a recession."