Manufacturing levels have plunged to a new low in November with new orders contracting at their fastest rate in 17 years.

The monthly index from the Chartered Institute of Purchasing & Supply (CIPS) fell to 34.4 in November, down by a record 6.3 points from October and the lowest reading since data was first collected in January 1992.

Despite the fall in the value of the pound, overseas demand for UK products declined dramatically. In particular, companies reported lower levels of new work received from clients based in the US, mainland Europe and East Asia.

In addition, the rate of job losses accelerated sharply to a survey record, as companies began redundancy and workforce rationalisation programmes.

However, the cost of raw materials fell for the first time since July 2005 as the input price index dropped to 44.2.

Roy Ayliffe, director of professional practice at CIPS, said: “November saw the manufacturing sector crash at a record rate as the headline index fell to its lowest historical reading.

“What’s more, it’s clear that the UK isn’t suffering alone as the more favourable sterling failed to encourage demand from foreign clients – especially those based in the US, mainland Europe and East Asia.

“Though there were some gasps of relief as the cost of key commodities slumped for the first time in over six-and-a-half years, even this was another echo of dwindling global demand.”

The severity of the falls may encourage the Bank of England’s Monetary Policy Committee (MPC) to make further cuts to the interest rate on Thursday.