LONDON (Reuters) – British factory output fell in December at the fastest rate since 2012 as a tepid global economy hurt demand and businesses further reduced stocks of goods they had built up in case of a no-deal Brexit, a survey showed on Thursday.
FILE PHOTO: Laser operator Shaun Clements removes an offcut at Contracts Engineering Ltd, a steel products manufacturer, in Sittingbourne, southeast England, Britain May 9, 2015. REUTERS/Luke MacGregor/File Photo
The output gauge in the IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 45.6 from 49.1 in November, its lowest since July 2012. Readings below 50 denote contraction.
The broader headline PMI, which combines gauges of output, employment and orders, fell to 47.5 from 48.9 – revised up only slightly from a preliminary reading of 47.4 and marking a four-month low.
“With demand weak and confidence remaining subdued, input purchasing was pared back sharply and jobs were cut for the ninth successive month,” said Rob Dobson, an economist at survey compiler IHS Markit.
Official data last month showed British economic growth slowed to an annual 1.1% in the third quarter of 2019, and it has not been below this rate since 2010, and industrial output dropped by 1.3% year-on-year.
Past PMIs have sometimes overstated economic slowdowns, and do not cover the public sector, where spending is rising. The job market also remains fairly solid with unemployment at a 44-year low.
Thursday’s survey was c