1st Apr 2025 09:50
(Alliance News) - Manufacturing activity in the UK continued to decline in March, albeit at a slightly lower pace than anticipated, survey results published by S&P Global showed Tuesday.
The S&P Global UK manufacturing purchasing managers' index fell to a 17-month low of 44.9 points in March from 46.9 in February. It however beat the flash estimate of 44.6. Falling further from the neutral 50-point mark separating growth from contraction, it indicates the pace of decline sped up in March.
Pertinently, the decline in new orders was at the sharpest rate in 19 months, S&P Global highlighted.
UK manufacturing production contracted for the fifth consecutive month and at the quickest pace since October 2023.
Factory owners surveyed noted a tough trading environment amid rising geopolitical tensions, weak client confidence, and economic slowdown in domestic and overseas markets, S&P Global said.
S&P noted potential tariff uncertainty which undermined current and expected future conditions.
It added: "The downturn was widespread, with contractions signalled across all sub-sector definitions [consumer, intermediate and investment goods] and all size categories [small, medium and large]. Small-scale producers saw the steepest decrease in output.
Rob Dobson, director at S&P Global Market Intelligence, said: "Companies are being hit on several fronts. Many reported that domestic market conditions are deteriorating, costs are rising due to changes in the national minimum wage and national insurance contributions, geopolitical tensions are intensifying, and global trade faces potential disruptions from tariffs."
A slew of tax and bill hikes are coming into effect in April in the UK, such as higher council tax, energy bills, employer national insurance contributions and fuel costs.
Dobson said the outlook was "darkening", with overall business optimism plunging to its lowest rate since late-2022.
"Fears about current and future performance put manufacturers on an increasingly cost cautious footing, with employment, stock holdings and purchasing all falling as companies looked to work leaner and protect cash flow, margins and competitiveness. Many firms are clearly hunkering down as they expect difficulties to continue in the coming months," he said.
S&P Global compiles the PMI each month using survey responses from a panel of around 650 manufacturers in the UK. The responses were collected between March 12 and 26.
By Tom Budszus, Alliance News slot editor
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