Economic activity has declined as manufacturing has suffered the worst supply chain problems since the 1990s, but there are signs that a better era will come.
- Delayed shipments, Brexit, and global demand for materials hit supply chains
- But manufacturing was showing signs of growth last month as well.
Severe supply chain disruptions hindered manufacturing performance last month, according to the results of a closely monitored study.
The problem of supply chain disruption has been the worst since the 1990s in January this year, and is slightly better than the peak of the pandemic in April 2020.
Manufacturing grew to some extent last month, but was affected by delays in international shipments, strong global demand for raw materials, and Brexit-related trade tensions.
New data show that the UK economy continued to slump during the first two weeks of February, but fell slower than the sharp drop in January.
Trouble: The problem of supply chain disruption was the worst since the 1990s in January this year.
The IHS Markit / CIPS Flash UK Composite PMI Report arrived at 49.8 and anything less than 50 is considered a shrinking market.
This is an improvement over the January 41.2 number.
The manufacturing sector recorded a flash PMI of 54.1 due to an increase in new orders, but many reported that it was difficult to fulfill orders to existing EU customers due to rising costs and delays in shipping, and exports. Is still awkward.
The service sector continues to struggle due to the remaining Covid-19 blockade and restrictions. It recorded a PMI of 49.7 compared to 39.5 in January.
But overall, February’s flash data, which accounts for 85% of the final forecast respondents released next month, shows only a slight drop in private sector production compared to the sharp drop in January. Not shown.
In the manufacturing industry, the production index rose slightly to a score of 50.5, but the growth rate was the weakest since June 2020.
Results: According to IHS Markit, results from different business units across the UK
Trouble: Chart showing supplier delivery dates since 1992
Output: Chart showing output and GDP level since 2007
Due to delays in ports and global supply chains, 58% of the surveyed respondents had longer delivery times and only 2% improved.
The service continues to lower overall scores due to strict restrictions on travel, leisure and hospitality.
However, surveys show signs of stabilization in staffing in this sector, with unemployment slowing compared to January.
Some manufacturers also reported that the closure of hospitality reduced their sales volume. This means that the blockade has a knock-on effect.
The data also show that the total amount of new work received by companies has declined slightly for the fifth straight month, with export sales falling below domestic orders for the first time since September last year.
Chris Williamson, Chief Business Economist at IHS Markit, said: ..
“The hospitality sector, including hotels and restaurants, reported a sharper decline, as did the transportation and travel sector, but the contraction rate was significantly eased.”
Duncan Brock, Group Director of CIPS, added:
“Manufacturers were most affected because production could be shut down due to shipping and raw material shortages, leaving many service businesses in an inoperable blockade.”
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Supply chain problems at the worst level since the 1990s
Source link Supply chain problems at the worst level since the 1990s