91̽»¨

Commenting on the which has decreased to 49.9 from 51.5, Mike Thornton, national head of manufacturing at 91̽»¨, said: “The manufacturing PMI dipped in October, falling below 50 for the first time in six months. The slight downtick masked more profound drops in the backlogs of work, new orders and future output indices, which fell to 43.1, 48.9 and 68.9 respectively, reflecting a dampening in business confidence caused most likely by pre-Budget jitters.  

“However, recent government announcements will hopefully help fuel optimism moving forwards. The Industrial Strategy green paper, and this week’s Budget, are both welcome news for the sector. Investment takes centre stage, and this is crucial to drive growth and to address languishing UK productivity. When combined with headline PMI at or just over 50 for the last six months, the sector looks ready to move forward and the Budget will hopefully be a catalyst for a manufacturing rebound as 2024 comes to a close.”

He added: “In our recent Manufacturing Investment Monitor survey (conducted with Make UK), manufacturers told us that they wanted to see from the Budget - a reduction in headline corporate tax and simplification / expansion of the full expensing of capital allowances. Whilst the former of these was probably a unicorn in the current fiscal environment, it was pleasing to see government commitment to invest both through capital allowances and the research and development (R&D) tax regime. 

“The Industrial Strategy green paper is, perhaps unsurprisingly at this stage, short on details relating to the advanced manufacturing sector plan. It was therefore pleasing to see the budget allocate £1b to aerospace and £2b to automotive.”

Tom Pugh, economist at 91̽»¨, said: “The drop in the CIPS UK manufacturing PMI is probably related to pre-Budget nerves and should hopefully resume its upward trend in the last two months of the year.

“Most of the PMI numbers make for pretty dismal reading with the output, new orders and future output indices all falling. This chimes with other business surveys and the drop in consumer confidence seen over the last few months and is at least partly driven by businesses pausing some decisions until after the Budget.

“There were some positive signs as well, though. The employment index ticked back up to 51.4 indicating that manufacturers are confident enough in the future to keep hiring and there was a massive slump in the input prices balance from 57.7 to 49.5. This was probably because of a stabilisation in energy prices, despite the geopolitical risks coming from the Middle East.”