The UK’s manufacturing sector stood on the brink of a deep recession in October after firms suffered their worst slump in output and new orders since the beginning of the pandemic. Factory output was hit especially hard by a drop in new orders amid a global fall in the demand for industrial goods. The S&P Global/CIPS UK Manufacturing PMI, a measure of activity across the sector, scored 46.2 in October, down from 48.4 in September to hit a 29-month low. A figure below 50 signals that the sector is shrinking. An element of the index that tracks domestic and export orders plunged to 39.9 from 44.8 to mark its lowest level since the financial crisis in 2009, excluding the lows hit during the pandemic. Fhaheen Khan, senior economist at the manufacturing industry lobby group Make UK, said the chancellor, Jeremy Hunt, will draw up a budget in a fortnight knowing that factory output is shrinking and a deep recession across the manufacturing sector is almost certain. “As the economy tries to find its bearings after months of political crisis, manufacturing may already be in a recession with demand falling rapidly,” he said. “Until recently, the consumer’s willingness to spend on goods and services was the final saving grace ensuring industry’s persistence in trying times, despite record levels of inflation. “It is clear there is a limit to how long this can go on for with a slowdown pointing to further decline and a deep recession next year looking more likely by the day,” he added. Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: “Looking ahead, demand for industrial goods looks set to fall further as real incomes continue to be hit by above-target inflation, the watering down of government support for energy bills in April, austerity measures and higher unemployment.” Turkey, one of the world’s largest manufacturing hubs, reported a drop in output on Tuesday, as did China, South Korea and Germany. Japan’s factory owners reported that activity grew at its slowest pace in 21 months in October following marked declines in output and overall new orders.