UK August final manufacturing PMI 43.0 vs 42.5 prelim

<ul><li>Prior 45.3</li></ul><p>The headline reading is a 39-month low as UK manufacturing activity takes a big hit in August. Factory orders are seen tumbling in the face of higher rates with demand also being hit by weaker domestic and export conditions. S&amp;P Global notes that:</p><p>“August saw a further deepening of the UK manufacturing
downturn. The PMI sank to a 39-month low as output
and new orders contracted at rates rarely seen outside
of major periods of economic stress such as the global
financial crisis of 2008/09 and the pandemic lockdowns.
</p><p>"Manufacturers reported a weakening economic backdrop
as demand is hit by rising interest rates, the cost-of-living
crisis, export losses and concerns about the market
outlook. While this is being felt across the manufacturing
industry, business-to-business companies are especially
hard hit. Intermediate goods producers saw the steepest
drops in output, new orders and employment as a result.
</p><p>“The downturn is also forcing companies into a more
defensive posture. Purchasing activity, inventory holdings
and staffing levels were all cut back in August as
manufacturers strived to control costs, protect margins
and operate in a much leaner and efficient manner.
</p><p>"The 'plus' side of the downturn is that input costs are
now falling at the quickest pace since January 2016
and inflationary supply chain issues are abating, which
should help feed through to lower goods price inflation
in the coming months. The survey data therefore suggest
policymakers will become increasingly focused on
concerns over the economy's health as they mull the need
for further rate hikes.”</p>

This article was written by Justin Low at www.forexlive.com.