A score below 50 suggests contraction in the sector.
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Williamson pointed out that it was too early to say if the surveys will remain in such weak territory in coming months, leaving substantial uncertainty over the extent of any potential downturn.
The closely watched Markit/CIPS Manufacturing Purchasing Managers’ Index dropped to 48.2 in July, down significantly from June’s reading of 52.4.
Britain’s economy is shrinking at its fastest rate since the 2008-09 financial crisis, according to latest data.
In addition, the volume of incoming new business dropped for the first time since the end of 2012, cited by the report as the fastest decline since early 2009 and again fuelled by uncertainty over the European Union vote.
Moreover, sluggish market demand indicated by the declining fixed-asset investment growth rate in the first half of the year, especially in the private sector, and the reduction of excessive production capacity in some traditional industries have combined to contribute to the contraction in the manufacturing industry. The U.K. benchmark rate has sat at a record low 0.5% since March 2009.
David Noble, group chief executive officer at the Chartered Institute of Procurement & Supply (CIPS), said: “Though a marginal drop in the index compared to last month, the sector’s downhill course is a seriously disappointing development, with purchasing activity falling for the second consecutive month, and following another drop in new orders”. Moreover, the rate of job loss was the second-sharpest for nearly three-and-a-half years.
It added that purchase price inflation notched up to a five-year high last month, as the fall in sterling, coupled with a rise in metal and commodity prices, drove up import costs.
The report comes not long after it was revealed that vehicle manufacturer Ford is considering closing down its last two United Kingdom factories, amid affordability concerns related in part to the vote to leave the EU.
The depreciation of rupee also supported Indian exporters as survey data pointed to the quickest rise in new business from overseas since January.
Services sector activity, considered the mainstay of then United Kingdom economy, fell to its weakest level in July, since February 2009, according to the latest post-Brexit data release.
Lukman Otunuga, a research analyst at FXTM, said: ‘Britain’s manufacturers seem to be suffering heavily post-Brexit and this could attribute to the factors which prompt the Bank of England to take action in an effort to regaining some economic stability’.
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That is a large drop from this time past year, when it was 0.8 – but a rise from -27.7, where it fell just after the referendum.
