Manufacturing activity falls to lowest in decade

Mon 4 Aug 2008
LONDON (ShareCast) - British manufacturing activity in July fell by the fastest rate in ten-years, raising fresh fears of a recession, as firms struggled with higher raw material costs and lower orders.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit Purchasing Managers' Index (PMI) fell to 44.3 last month from 45.9 in June, the weakest reading since December 1998.

The figure was below analysts' expectation of 45.5 and is the third month in a row the index has been below 50, a level which indicates contraction rather than growth.

Companies said weaker demand in both the UK and abroad have been a factor as well as higher fuel and raw materials costs.

"Deteriorating economic conditions, both at home and abroad, was the main factor depressing the sales of UK manufacturers," said the report.

The input price index rose to 82.4, the highest on record, last month from 82.1 in June, while the output price index also rose to a record 63.1 from 62.6.

Source:http://uk.biz.yahoo.com/080801/214/i46rd.html