Economic Buzz: UK Composite Output Index At 48.3 In November

23 Nov 2022 , 04:15 PM

UK private sector firms signalled another reduction in business activity during November, which stretched the current period of decline to four months. New orders meanwhile decreased at the fastest pace for almost two years as squeezed client budgets continued to hit demand in both the manufacturing and service sectors. On a more positive note, business expectations for the year ahead rebounded from the 30-month low seen in October. Many survey respondents commented on recession worries and increasingly challenging economic conditions, but there were fewer comments citing domestic political uncertainty. The headline seasonally adjusted S&P Global / CIPS Flash UK Composite Output Index posted 48.3 in November, up only fractionally from 48.2 in October and signalling a further modest fall in private sector business activity. The index has now registered below the crucial 50.0 no-change value for four consecutive months. Manufacturing production (index at 45.4) continued to decline at a faster pace than service sector activity (48.8). Overall volumes of new work decreased for the fourth month in a row and the rate of decline accelerated to its fastest since January 2021. Lower volumes of new business from abroad contributed to the deterioration in order books during November, especially in the manufacturing sector. Employment numbers continued to rise in November, although falling volumes of incoming new work contributed to a slower rate of job creation. Strong input cost pressures continued in November and the overall rate of inflation eased only slight since October. Prices charged by UK private sector companies meanwhile increased at the slowest pace since August 2021. The index measuring business activity expectations for the year ahead increased by 3.2 index points in November and therefore recovered around two-thirds of the loss seen during October (-4.8 index points). Powered by Commodity Insights