PMI plummets to three year low

The slump was driven by evapourating confidence among domestic and international buyers, CIPS/Markit reported. Over a third of factories noted falling new orders during May, the survey revealed. Exports were down for a second successive month with mainland Europe a particularly hostile market, CIPS/Markit said. Some operators had reacted by cutting jobs with redundancies dominating survey data for the first time in 2012, according to CIPS/Markit Rob Dobson, senior economist at Markit commented: "The PMI sank to a three-year low as firms cut production in response to levels of new work nosediving. Perhaps of greatest concern is that this month's drop is not simply linked to the ongoing crisis of the Eurozone, but to increasing weakness of the UK domestic market." David Noble, chief executive officer at CIPS added: "This month manufacturers' reliance on domestic demand was laid bare, as overseas orders also slowed for a second month in a row. As a result, jobs have been affected, with businesses reducing staff for the first time in 5 months and an increase in redundancy packages." The figures mark the first time PMI has dipped below the 50 mark indicative of growth in 2012. However, not all parties were experiencing the doom and gloom mood projected by the figures said the EEF. Lee Hopley, chief economist at the EEF said: "The sector is a very varied and agile one and some sectors with longer order books and, a diversified customer base, will not necessarily recognise the declining trends indicated by the survey."