1st May 2025 09:52
(Alliance News) - The UK manufacturing economy remained in downturn territory at the start of the second-quarter, numbers on Thursday showed, hurt by trade uncertainty and rising cost pressure.
The S&P Global UK manufacturing purchasing managers' index picked up to 45.4 points in April, from 44.9 in March, though it remained below the 50 point neutral mark. The reading topped the 44.0 flash estimate. March's figure had been a 17-month low.
"Manufacturing production contracted again in April, albeit to a slightly lesser extent than in March, as output was scaled back in response to reduced intakes of new work from both domestic and overseas markets. Panellists reported that rising economic and trade uncertainties [including prospective US tariffs] had drained confidence from both consumer and business-to-business clients, resulting in an increased reluctance to commit to new contracts," S&P Global said.
"These factors also led to a comparatively large contraction of output and new work received at investment goods producers, suggesting that subdued market confidence was hitting demand for capital goods especially hard."
New business for UK manufacturers slid for the seventh month in succession in April.
"Similar to the picture seen for production, the rate of decrease in new work received remained substantial despite easing slightly since the prior survey month. New export orders fell at the quickest pace in almost five years, with demand from the US, Europe and mainland China all lower," S&P Global added.
Cost pressure intensified, S&P Global added. Purchase prices surged to the loftiest level since December 2022, amid higher energy and staff costs, as well as supply chain uncertainty.
"Manufacturers passed on some of these cost increases to their clients, leading output price inflation to accelerate to a 26-month high," S&P Global added.
Business optimism, meanwhile, slumped to a 29-month low. S&P Global said only 47% of the survey panel expect a rise in output over the coming year.
The survey features a panel of 650 manufacturers. The responses were collected between April 9 and 25.
The service and composite PMI readings are released on Tuesday.
By Eric Cunha, Alliance News news editor
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