While the deterioration in conditions is milder than in November, it points to a substantial drop in production and new orders amid weakening customer demand. Conditions in domestic and foreign markets are deteriorating due to the impact of high energy prices, S&P Global said.
“Demand conditions remained subdued and operations were impacted by rising energy prices and inflation. Customers have continued to reduce their spending and new orders have dropped significantly. The reduction in production requirements in December led to a reduction in employment, inventory purchases and finished products. In some places, companies have also sought to reduce spending by using existing input inventories,” said Sian Jones, chief economist at S&P Global Market Intelligence.
According to her, inflation and subdued demand will also be reflected this year, with industrial production showing growth of 0.7% for the full year.
The government wants a loan of up to 150 billion from the Union
Economic
The pace of decline in domestic industry was the slowest since September but still one of the steepest since the 2009 global financial crisis. New orders fell faster than production.
Prices of inputs from industrial production, especially energy and material costs, were on the rise. But firms have not fully passed on rising costs to customers, inflation outflows being the lowest since March 2021. Firms have sought to save on expenses and adjust prices to support sales.
At the end of the year, manufacturers also reduced the number of workers and laid off employees due to less loaded capacities. Employment has fallen fastest since August 2020.
Producer prices continued to rise in November, the highest in agriculture
Economic
