Manufacturing Shrinks
02 / Dec / 2011
Britain's manufacturing sector shrank for a second successive month in November and at its fastest pace since June 2009 as output and orders fell on weak global demand, a survey showed last Thursday, fuelling fears the country faces another recession. The decline in activity amid a worsening debt crisis in the euro zone forced companies to cut jobs at the fastest rate in more than two years, the purchasing managers' survey showed. Output also fell last month at the fastest pace in more than two years and new orders contracted for a fifth straight month, although at a slower pace than in October. The Markit/CIPS Manufacturing Purchasing Managers' Index fell to 47.6 in November, its lowest level since June 2009, from an upwardly revised 47.8 in October. The index was below the 50 mark that indicates growth in activity for a second month running. Analysts predicted that the manufacturing sector would continue to contract in the coming months. There was little immediate gilt reaction to the release of the manufacturing PMI, with March gilt futures continuing to drift downwards. The Organisation for Economic Cooperation and Development warned this week that Britain is heading for a modest recession early next year while the official forecast for UK economic growth next year was slashed to 0.7 percent, from 2.5 percent. The survey showed input prices fell in November for the first time since July 2009, offering some relief to manufacturers who raised their own prices by the smallest margin since October 2009.