The Eurozone is on the brink with “no sign of recovery”, while UK orders continue to slump due to cutback with concerns growing over the economic outlook.
Europe’s manufacturers suffered a slump in demand last month, as UK factory owners also reported a slowdown in orders.
France’s manufacturing sector faced in November its steepest decline in new orders since the first wave of the COVID-19 pandemic in 2020, a survey by S&P Global showed.
Alongside France, Germany and Austria also reported a rapid decline in demand for their goods in November, with Berlin reporting its fastest drop in output.
The eurozone purchasing managers’ index (PMI) fell to 45.2 last month, down from 46 in October, while in France the PMI slumped to 43.1, falling from 44.5 in October.
Any reading above 50 indicates that activity is growing, while any score below means it is contracting.
Dr Cyrus de la Rubia, the chief economist at Hamburg Commercial Bank, said, as reported by the Guardian: “These numbers look terrible. It’s like the eurozone’s manufacturing recession is never going to end. As new orders fell fast and at an accelerated pace, there’s no sign of a recovery any time soon.”
The UK’s manufacturing downturn worsened last month with activity falling to a nine-month low, as firms faced less demand and cutbacks as concerns grow over the economic outlook, according to new data.
As a result, factory owners cut jobs and investments in November.
The UK PMI dropped to a low of 48 in November, from 49.9 in October and below a flash estimate of 48.6 posted last month.
Manufacturers also reported getting fewer orders from customers who were delaying investment decisions, or making cutbacks to new projects due to uncertainty in the UK market and rising geopolitical tensions.
In a blow to Chancellor Rachel Reeve, some firms said announcements in the UK’s autumn Budget had led to budgets being reassessed at manufacturers and their clients.
The Government used the Budget to lay out plans for £40 billion worth of tax rises next year, including raising the rate of employer national insurance from April.
Rob Dobson, director at S&P Global Market Intelligence, said conditions for manufacturers “deteriorated” in November, while the “export market also remained bleak, as weaker demand from the US, China and EU led to a further drop in new export business”.