16th Dec 2024 10:18
(Alliance News) - UK manufacturing activity declined this month, as employment fell at the fastest rate since 2009 if the pandemic is excluded, purchasing managers' index survey results from S&P Global showed on Monday.
The flash UK composite output index remained unchanged at 50.5 points in December, as improved service sector growth was offset by faster factory sector decline.
The services business activity index improved to 51.4 points in December from 50.4 in November.
However, S&P Global said: "December data indicated a fall in total staffing numbers for the third month in a row. Moreover, the rate of job shedding across the private sector economy was the fastest for almost four years. Service providers recorded a particularly steep decline in employment at the end of 2024, which was mainly linked to the non-replacement of voluntary leavers in response to rising employment costs."
It added: "Average prices charged by private sector firms meanwhile increased at the steepest pace for nine months, led by a robust and accelerated rise in the service economy. Survey respondents commented on the need to alleviate pressure on margins from higher salary payments, as well as general business overheads and greater prices paid for fuel and raw materials."
The flash UK manufacturing output index worsened to 45.7 points in December from 48.3 in November. The manufacturing PMI deteriorated to 47.3 points from 48.0. Being below 50 points, all of the factory-sector readings indicate business contraction.
Chris Williamson, chief business economist at S&P Global Market Intelligence said: "Firms are responding to the increase in national insurance contributions and new regulations around staffing with a marked pull-back in hiring, causing employment to fall in December at the fastest rate since the global financial crisis in 2009 if the pandemic is excluded."
Also on Monday, S&P Global data showed UK consumer confidence deteriorated in December.
The consumer sentiment index fell to 46.6 points in December from 46.9 in November.
On Sunday, PA reported that business confidence among Britain's manufacturers has fallen at the sharpest rate since the start of the pandemic, citing new research.
A survey of over 300 companies found that escalating costs have affected their outlook on the economy.
Almost three quarters of manufacturers said costs increased by up to a fifth in the last year, while around one in 12 had seen their costs increase by up to a half.
The composite PMI is compiled by S&P Global from responses to questionnaires sent to survey panels of around 650 manufacturers and 650 service providers in the UK. The responses were collected between December 5 and 12. Final December data will be published on January 2 for manufacturing and on January 5 for services and composite indicators.
By Tom Budszus, Alliance News slot editor
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