´óÏó´«Ã½

More evidence of the nature of the downturn and how the patterns are developing.

This is from the purchasing managers index, carried out monthly by Markit Economics for the Royal Bank of Scotland, so it doesn't have the more common current focus on financial and credit difficulties.

There should be no surprises that the findings look ugly.

Nor is it surprising that they are the worst ever: this index is only 11 years old, so it hasn't seen a recession before.

It is the patterns that are most interesting, and particularly that manufacturing is now outstripping the service sector.

Markit's David Fenton says there is "an ominous decline in new orders" as customers delay their purchasing and new business is harder to find.

Companies are using the slack in new business to reduce their backlog of work, while stocks are being run down rapidly.

You might think the lack of orders might speed up delivery times. Not so.

There seem to be problems with the availability of some input goods, so sellers are getting slightly worse on that score.

Manufacturers are shedding staff on an alarming scale.

Across that sector, 27% of companies surveyed said the reduced their workforce during January, while only 5% said they increased it.

Compared with the back end of last year, the employment impact is clearly accelerating.

In the service sector, it was the travel, tourism and leisure business that cut their workforce fastest last month, while the new economy of technology, media and telecoms were facing many of the same problems.

While inflation is confirmed as much less of a problem than last summer, the striking feature is that there is a slight uptick in input prices.

This is being explained by sterling's decline.

With inflation causing much less concern than the prospect of deflation, it can be forgotten that a falling currency imports inflation.

But with demand so flat, there's less evidence that prices are being passed on.

Similar survey material from across Britain shows how Scotland is faring in this recession.

On output data, it's doing slightly worse than the UK average, and on employment, it's doing slightly better.

The areas facing the worst problems, according to this survey material, are the West Midlands - confirming it is now manufacturing that is now leading the decline - and Northern Ireland, where the collapse of house prices has been most severe.

There is a sort of good news: while the decline continues, the evidence from similar indices across the eurozone, the USA and Russia all agree with the UK and Scottish figures in showing the rate of decline found in December may be slowing up a bit, which is of course, the first sign that the floor of this decline may be within sight.