The Guardian newspaper are reporting Britain's manufacturing sector has suffered its first contraction in two years, fuelling fears that the UK economy is stumbling.
The detailed figures for the PMI showed that output grew slightly among Britain's manufacturers, while new orders and employment levels were down. Input prices grew at a slower pace, due to price reductions in plastics and steel.
Howard Archer, chief UK and European economist at IHS Global Insight, said this was a "pretty horrible survey".
"It is not just the fact that the headline figure showed overall manufacturing activity contracting for the first time in two years in July, but also that the more forward-looking elements of the survey point to further softness ahead – most notably new orders contracting for a third month running in July and at the fastest rate since May 2009. This was due to contracting domestic demand as export orders actually picked up although they remained well below the growth rates seen up until the first quarter of 2011."
These figures are further evidence the British economy has not responded to the CONDEMs Austerity packages, the Chancellor Osbourne promised the private sector would take the slack of public sector job loses.
It would appear private business is now making employment reductions, growth in the UK over the previous two quarters - the final of 2010 and the first of 2011 - put us fifth from the bottom among EU countries, beating only Ireland, Denmark, Portugal and Greece. The weak growth in the latest quarter will not lift us up these rankings. Manufacturers indicate there will be no short term bounce to growth as orders seem to be soft in the coming period.
This seems to me a case of history repeating, youth unemployment around 1million we are in danger of another lost generation in the labour market, the CONDEM government have cut by 85% help to keep young people in education through the EMA, they have scrapped the Future Jobs Fund, it's easy to cut, now the CONDEMs have to help the young into work.
The CONDEMs need to discover a growth plan, they need to stop playing politics, talking rubbish about sovereign debt and frightening people, the cycle of cutting will only continue until a strategy to grow the economy and the return of confidence, I fear the CONDEMs political narrative is more important to them then admitting to the need for plan B.