Manufacturing saw a slump in activity extend across a second month, as Markit’s purchasing managers’ index (PMI) slipped further.
The headline figure was 49, a figure which hasn’t been worse for over 2 years. Anything below 50 indicates a contraction in the market. July’s figure was 49.4, so that means there have now been 2 successive months of contraction in manufacturing activity.
One of the main reasons for the fall was the number of export orders falling as overseas demand startled to dwindle in line with falling demand across the UK.
Manufacturing had, up until recently, been driving growth in the UK and there had been somewhat of a renaissance in the first half of 2011.
Rob Dobson, economist at Market, described the change in the manufacturing sector as it having slipped into "reverse gear" into the second half of 2011.
Meanwhile, manufacturing activity contracted across the whole of the eurozone, which also saw a figure of 49 on the PMI index, the first time since the recession days in September 2009 that a figure under 50 had been recorded.
These trends were not just consigned to Europe. South Korea and Taiwan, two well known powerhouses in the manufacturing world, saw their export orders slip, whilst China, although still showing growth, saw a slowdown in activity.