A common measure for the health of the manufacturing sector has reached its lowest level since just after the EU referendum, according to the latest figures.

The Manufacturing Purchasing Managers’ Index (PMI), a survey of businesses produced by IHS Markit and the Chartered Institute of Procurement and Supply (Cips), fell to 52.8 in August from 54.0 in July, the lowest figure in more than two years, although any score above 50 indicates growth.

This reading means the sector is heading for "zero growth" in the third quarter, according to IHS Markit, based on the historical relationship between the PMI data and gross domestic product growth.

August’s figures show signs of contraction in manufacturing, such as slowing rates of output growth and new orders. Growth in production in manufacturing fell to a 17-month low.

Exports led the drag on new order growth, as orders fell for the first time since April 2016. The monthly decline was the sharpest since 2011.

IHS Markit, which compiled the survey, said that some manufacturers linked this drop to weaker growth in the global economy.

Business confidence was at a 22-month low, with 47pc expecting higher production in a year’s time. Managers surveyed cited Brexit and the exchange rate as reasons to be concerned.