Financial News: UK Manufacturing Activity Remains In Downturn

UK Manufacturing Activity Remains In Downturn

05/01/2025 - 05:40:00 (RTTNews)

(RTTNews) - UK manufacturing activity deteriorated for the seventh successive month in April amid adverse global market conditions along with inflationary pressures, final survey results from S&P Global showed on Thursday.

The final manufacturing Purchasing Managers' Index rose slightly to 45.4 in April from a 17-month low of 44.9 in March. However, any reading below 50 indicates contraction in the sector. The reading was also above the flash score of 44.

British manufacturers scaled back production in April in response to reduced intakes of new work from both domestic and overseas markets. The weaker demand was due to rising economic and trade uncertainties, including prospective US tariffs, which had drained confidence from both consumer and business-to-business clients.

New export orders fell at the quickest pace in nearly five years, with demand from the US, Europe, and mainland China all lower.

Manufacturing employment declined for the sixth successive month, and firms also reduced purchasing and stocks in April. The survey respondents revealed that lower workforce numbers were necessary to offset the impact of rising national insurance contributions, increased minimum wages, and other cost rises.

In addition, supply chains remained under pressure despite lower demand for inputs, with average vendor lead times increasing for the sixteenth month in a row amid market uncertainty.

On the price front, input price inflation accelerated to the highest since December 2022, linked to higher energy prices caused by global supply chain uncertainties, including prospective US tariffs. Consequently, selling price inflation rose to a 26-month high.

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