The headline PMI posted 47.8 in August, up from 47.2 in July but still signalling a moderation in the health of the sector during the month.

Although new orders softened to a lesser extent than in July, the pace of moderation was still solid and led firms to scale back output, employment and purchasing activity, S&P Global, which compiled the data, said in a release.

Moreover, stocks of inputs were reduced to the largest degree in just over a year.

Meanwhile, input costs continued to rise sharply in August and manufacturers increased their output prices at a faster pace than in July this year.

Business conditions have softened continuously since April. Challenging market conditions led to a further softening of new orders in August, the fourteenth in as many months. The rate of moderation was solid, despite easing to the weakest since May.

New export orders returned to growth for the first time since June 2023. With overall demand conditions remaining subdued, firms scaled back their production, employment and purchasing activity in August.

Price pressures exacerbated the slowdown in production, which was the most pronounced since November 2022.

Input costs continued to rise at a marked pace, albeit one that was slightly softer than in July.

Currency weakness was the principal factor leading to higher input prices, while there were also reports of increases in costs for raw materials and logistics.

In response to higher input costs, manufacturers raised their own selling prices. Moreover, the rate of inflation quickened for the second month running to the fastest since April.

Manufacturers displayed a reluctance to hold inventories at a time of subdued new orders, reducing their holdings of both purchases and finished goods during August.

The drop in stocks of purchases was the strongest since July 2023.

Fibre2Fashion News Desk (DS)