Manufacturing suffers worst month since the depths of the pandemic

Producers had a grim end to the year as the industry experienced its worst month since the lows of the pandemic.

The closely monitored S&P Global Purchasing Managers Index (PMI) showed that the sector contracted for the fifth month in a row in December.

The decline was due to weak customer demand in the UK and abroad due to higher costs, market volatility and Brexit-related complications.

The data, heralding the start of what looks set to be a dismal year, came along with PMI data for the US and China, which also brought dismal data.

The British reading of 45.3 – on a scale where the 50 mark is between growth and contraction – was lower than November’s 46.5, the lowest since May 2020.

If we take out Covid, it was the worst month since May 2009, raising the likelihood that the economy will contract at the end of 2022 and the UK plunged into recession.

The manufacturing recession means job losses – the worst level since October 2020, according to the report.

The US PMI reading of 46.2 was the worst since May 2020 as production and customer orders continued to cool.

In China, the Caixin/Markit manufacturing PMI index fell to 49.0 for December, a fifth consecutive month of contraction.