The downturn in the UK manufacturing sector took a turn for the worse in July, as rates of contraction in output, new orders and employment all accelerated, latest figures showed.
The seasonally adjusted S&P Global/CIPS UK manufacturing PMI fell to 45.3 in July, down from 46.5 in June, its lowest reading in the year-so-far and joint-weakest since May 2020.
The report showed increasing signs of market weakness also led to cutbacks in purchasing activity and inventory holdings, as manufacturers aimed to protect cash flow and operate on a leaner footing.
The downturn was widespread by sector, with all three broad product categories covered (consumer, intermediate and investment goods) seeing declines in both variables.
Rob Dobson, director at S&P Global Market Intelligence, said: "Although manufacturers maintain a generally positive outlook for the sector, with over half still expecting output to rise over the coming year, other forward-looking indicators show the mire that industry is currently facing."
"Domestic and export demand are weakening, and backlogs of work are declining sharply, all of which likely presages further cutbacks to production, employment and purchasing in the months ahead."
The slump was reflected in Europe where the HCOB Eurozone manufacturing PMI, compiled by S&P Global, fell to 42.7 in July, down from 43.4 in June.