Manufacturing data disappoints

THE downturn in the manufacturing sector worsened in October as companies received fewer orders and costs rose at a faster pace, a survey showed on Thursday, reviving worries about the country’s fragile recovery.

The CIPS/Markit Purchasing Managers’ Index (PMI) for the manufacturing sector fell to 47.5 from a downwardly revised 48.1 in September, dipping further below the 50 mark which separates growth from contraction.

The figure is also below economists’ forecasts of 48.0 and may throw the debate about the chances of more stimulus from the Bank of England open again.

Several economists changed their view following strong economic growth of 1% in the third quarter, expecting no extension of the BoE’s quantitative easing programme at next week’s policy meeting.

But manufacturers cut production for a fourth month in a row and new orders fell at a faster rate than in September as export demand dwindled, the PMI data showed.

“While the road to an export-led recovery is still blocked by the ongoing difficulties in the Eurozone, it is concerning to hear further reports of the global slowdown hurting trade with other regions such as Asia,” Markit economist Rob Dobson said.

The index for new orders fell to 47.7 in October from 49.9 in the previous month.