UK's manufacturing output drops to lowest point since 2012 amid coronavirus outbreak

UK manufacturing has experienced a severe drop in output. (Picture: PAUL ELLIS/AFP via Getty Images)

Manufacturing in the UK has seen the biggest decline in output since July 2012.

According to new figures, the slowing down of the economy to contain the spread of the coronavirus has had a severe impact on manufacturing output in the UK.

The IHS Market/CIPS manufacturing purchasing managers index (PMI) gave a reading of 47.8 in March, down from 51.7 in February.

It is slightly worse than the 48 forecast in preliminary figures, but beat forecasts that it might drop to 46.5. Anything below 50 is considered a contraction.

The transport sector saw the steepest downturn in output (AFP via Getty Images)

It is the biggest decline in manufacturing output since July 2012.

Rob Dobson, director at IHS Markit, said: “The resulting job losses took the rate of decline in employment to its highest since July 2009.

“The effects were felt across most of manufacturing, with output falling sharply in all major sectors except food production and pharmaceuticals."

Mr Dobson added the transport sector, which includes car-makers that were already experiencing problems, suffered the steepest downturn.

“With restrictions aimed at slowing the spread of the virus expected to stay in place for some time, expectations of further economic disruption and uncertainty meant business optimism slumped to a series-record low," said the IHS Markit director.

"However, on a slightly more positive note, manufacturers still expect to see output higher in one year’s time.”

The news comes as shares in Britain’s biggest banks fell heavily this morning, as businesses scramble to save money by stopping payments to shareholders amid the coronavirus outbreak

Shares in HSBC fell 7.4 per cent, Barclays lost 4.6 per cent, Standard Chartered was down 6.2 per cent, while Lloyds lost 4.3 per cent of its value and the Royal Bank of Scotland was down 4 per cent.

Banks have faced pressure to ensure that businesses which need loans to survive the pandemic are able to keep their doors open.

The government has also promised to back loans to small and medium-sized businesses; however, many say they have faced serious problems in trying to get the money out.