Orders and output for the UK manufacturing sector worsened last month as concerns about weak demand and rising cost pressures continued to exert pressure.
The UK purchasing managers' index (PMI) for February fell to a 14-month low of 46.9, which was above the earlier flash estimate of 46.4 but down from January's 48.3 PMI reading. A PMI reading below 50 represents contraction.
Industrial output contracted for the fourth month running, with manufacturers scaling back production in response to lower new order intakes, the survey found, with companies reporting faced weaker demand from both domestic and overseas clients.
Weaker production and foreign demand was signalled from all three sub-industries surveyed, consumer, intermediate and investment goods, with consumer goods registering the steepest drops.
The February PMI data show UK manufacturers "facing an increasingly difficult trading environment", says Rob Dobson, director at S&P Global Market Intelligence.
"Weak demand, low client confidence and rising cost pressures are accelerating the downturns in output and new orders, while the Autumn Budget's changes to the national minimum wage and employer NICs are driving up inflation fears and intensifying the downward trend in staff headcounts."
He says the pace of manufacturing job losses is currently running at a rate not seen since the pandemic months of mid-2020.
"Cost and demand considerations also encouraged cutbacks to purchasing activity and stocks, as the tough economic backdrop placed manufacturers on an increasingly defensive footing."
Inflation worries are flagged too, as input costs rose at the fastest pace for over two years, which Dobson says is because suppliers are front loading expected increases in their own wages and NIC costs, with factory gate selling price inflation hitting a 22-month high.
"This combination of absent growth and rising prices will contribute to a growing dilemma for the Bank of England over the coming months," he says.