Financial News: Downturn In UK Manufacturing Sector Continues

Downturn In UK Manufacturing Sector Continues

09/01/2025 - 08:37:00 (RTTNews)

(RTTNews) - The UK manufacturing sector continued to shrink in August on faster declines in new orders and export business, survey results from S&P Global showed on Monday.

The factory Purchasing Managers' Index fell to 47.0 in August from a six-month high of 48.0 in July. This was also below the flash estimate of 47.3. A reading below 50.0 indicates contraction.

The survey showed that weak market conditions, tariff uncertainties and downbeat client confidence all contributed to a sharp drop in new order intakes. New export business contracted for the forty-third successive month.

The downturn in production volumes extended into its tenth consecutive month. Further, business optimism among manufacturers rose to a six-month high but it was still below its long-run series average.

Tough current conditions combined with an uncertain outlook led to further cutbacks to employment, input buying and stock holdings.

Regarding prices, the survey showed that input price inflation hit the highest since May. Firms passed on the part of the increase in input costs to clients in the form of higher selling prices.

"With manufacturers fearing that possible government policy decisions, including potential tax increases, could further hurt their competitiveness in domestic and export markets, the upcoming Budget will likely prove very important in guiding business confidence about the year ahead," S&P Global Market Intelligence Director Rob Dobson said.

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