The U.K.'s manufacturing activity suffered a steep decline in August, with the purchasing managers' index falling to a seven-year low, as the country faces Brexit volatility and weakening global economic growth, data from IHS Markit and the Chartered Institute of Procurement & Supply showed.
The headline seasonally adjusted purchasing managers' index fell to 47.4 in August from 48.0 in July. The Econoday consensus estimate was for a reading of 48.4. Readings above 50 indicate growth while less than 50 is a contraction.
The decline was led by a drop in new work, which registered its steepest fall in seven years. Manufacturers blamed Brexit uncertainty and slowing domestic and international economic growth.
New exports also fell at the fastest pace in seven years, with businesses pointing to global trade turbulence as the cause of waning overseas demand.
Business sentiment sank to its lowest level since July 2012 as producers expressed concerns about subdued economic expansion. However, 40% of businesses expect growth during the year, compared to 13% who predict a decline, which indicates some faith in a market recovery, according to the report.
Manufacturing employment declined at its fastest pace in more than six years, as businesses faced with uncertain market conditions sought to cut costs.
"The current high degree of market uncertainty, both at home and abroad, and currency volatility will need to reduce significantly if UK manufacturing is to make any positive strides towards recovery in the coming months," said Rob Dobson, director at IHS Markit.
