Investing.com - Activity in the U.K. manufacturing sector fell to its second-weakest reading since July 2016 last month, as the sector risks entering a recession in the near future, according to a closely watched business survey released on Friday.
There was a decline in new orders and employment fell for the second time in the last two-and-half years in January, as U.K. manufacturers continue to prepare for Brexit and signs of an economic slowdown in Europe have weighed on business sentiment, Rob Dobson, director of IHS Markit, said in a press release.
"With neither of these headwinds likely to abate in the near-term, there is a clear risk of manufacturing sliding into recession," he said.
"There were also signs that inventories of finished goods were being bolstered to ensure warehouses are well stocked to meet ongoing contractual obligations..." ahead of Brexit, he added.
Research firm Markit said its manufacturing purchasing managers’ index fell to 52.8, compared to forecasts for a reading of 53.5. While output rose, it was offset by weak expansion in the intermediate goods sectors and a decline in investment goods.
The prior month’s reading was 54.2.