The outlook for factories is bleak due to sluggish demand from key markets such as China and the United States, as well as logistical issues caused by Brexit and the pandemic.

In August, British manufacturing output and new orders plummeted, falling by the highest in two years due to economic concerns.

According to the most recent S&P Global/CIPS UK Manufacturing Purchasing Managers Index, output shrank the most since May 2020, when the pandemic reached its peak (PMI).

The index decreased to 47.3 in August from 52.1 in July; numbers above 50 indicate expansion, while numbers below 50 indicate contraction.

According to S&P Global, companies experienced a sharp decline in new orders in August, as both domestic and international client interest plummeted. They added that this resulted in the cessation of new job creation and a decline in business optimism.

Gabriella Dickens, the senior UK economist at Pantheon Macroeconomics, stated that August’s PMI data “suggests that a manufacturing sector recession is developing.

With the majority of survey indicators flashing red, Ms. Dickens did not find it surprising that “manufacturers are the least optimistic about the next 12 months since April 2020.”

“The bleak outlook currently weighs on labor demand,” she said.

S&P Global reported that demand from key markets such as China, the United States, and the European Union was weak last month, worsening problems with supply chains and logistical hubs caused by the epidemic and Brexit.

A good indicator was the cooling of input costs for manufacturers, with prices for raw materials, containers, and electronics decelerating by their largest margin since November 2020.

James Brougham, the senior economist at Make UK, stated that this morning’s PMI result, which indicates a recessionary performance in the manufacturing sector, is the worst in two and a quarter years.

“This morning’s data is crucial and possibly the government’s last warning shot. Immediate assistance is required to ameliorate the worst of the industry’s economic devastation.

“Many of our European counterparts have already taken such steps, and the British government should follow suit if the country’s manufacturing sector is to survive,” he said.