BRITAIN’S manufacturing industry is facing falling output, fewer orders and higher prices in its worst monthly performance for two-and-a-half years, a new assessment has found.

The dismal picture for the last month of 2022 came from international financial analysis group S&P Global/CIPS UK Manufacturing PMI, which also said employment levels were suffering as a result of the decline. 

“It is the sector’s worst performance for 31 months, and apart from the early days of the pandemic, one of the one of the worst since mid-2009,” its report said.

Rob Dobson, director at S&P Global Market Intelligence, said: “Output contracted at one of the quickest rates during the past 14 years, as new order inflows weakened and supply chain issues continued to bite.

“The decline in new business was worryingly steep, as weak domestic demand was accompanied by a further marked drop in new orders from overseas.”

December marked the fifth consecutive month of manufacturing decline, with low export demand worldwide, shipping delays and higher costs.

“Clients are increasingly downbeat and reluctant to commit to new contracts, not just in the UK but also in key markets like the US, China and the EU,” Mr Dobson said.

He said that the number of workers employed in manufacturing had fallen for the third month in a row.

Dr John Glen, chief economist at the Chartered Institute of Procurement & Supply, said: “The overarching concerns remain that there is little power in the UK economy’s engine of growth for 2023 and manufacturers were painfully aware of this as business expectations remained at historically low levels again.”