3rd Feb 2025 09:55
(Alliance News) - The UK manufacturing economy remained in decline in January, numbers on Monday showed, while post-budget worries hurt new business.
It was the fourth successive fall for the sector, though the pace of decline eased in January.
The S&P Global manufacturing purchasing managers' index rose to 48.3 in January, from 47.0 in December. Moving closer to the 50 point mark, the figure suggested the speed of decline abated. The figure was a hair above the 48.2 flash reading.
Survey publisher S&P Global said: "The PMI has signalled a deterioration in overall operating conditions in each of the past four months, with its level negatively impacted by four of its five components. Output, new orders, employment and stocks of purchases all declined, whereas average vendor lead times lengthened. Manufacturing production fell for the third month in a row in January, albeit at the slowest pace during that sequence.
"Weak demand and lacklustre business and consumer confidence were the main factors underlying the latest scaling back of output volumes. The downturn was centred on the consumer goods industry where the rate of decline accelerated to its sharpest since December 2023. The investment and intermediate goods industries were brighter spots, seeing output return to growth for the first time in three and four months respectively."
New business weakened for the fourth month in a row. S&P Global said there was anecdotal evidence that measures announced in the budget, including the hike in employer national insurance, led to cost worries and a fall in non-essential spend.
"Conditions remained weak in both domestic and overseas markets at the start of 2025. New export
business has now fallen throughout the past three years, with reports of lower intakes of new work from the EU and Middle East during the latest survey month," S&P Global added.
Optimism for the year ahead remained at "one of its weakest levels over the past two years". It recovered only slightly from December's two-year low.
S&P Global added: "Lacklustre sentiment was blamed on government policy, recession fears, rising costs, higher interest rate expectations and cutbacks to nonessential spending."
The survey features a panel of 650 firms, with responses collected between January 9 and 28.
By Eric Cunha, Alliance News news editor
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