The overall decline was only fractional, but driven by a solid falls in output and new orders. Domestic and foreign client demand weakened as hikes in selling prices dampened customer spending. At the same time, the rate of cost inflation picked up amid higher material and energy expenses. Firms sought to pass greater input prices on to their clients through another marked uptick in output charges.
Weak client demand also weighed on purchasing and hiring activity, as well as dampening firms' output expectations. Employment fell further amid a sharp decrease in backlogs of work.
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