Financial News: UK Manufacturing Sector Shrinks Sharply

UK Manufacturing Sector Shrinks Sharply

06/02/2025 - 09:54:00 (RTTNews)

(RTTNews) - The UK factory sector shrank further in May as the weak global demand, trade tensions and rising cost burdens weighed on production and new orders, the purchasing managers' survey results from S&P Global showed on Monday.

The final manufacturing PMI rose to a three-month high of 46.4 in May from 45.4 in April. The reading was also above the flash estimate of 45.1.

However, the score remained well below the neutral level of 50.0, suggesting contraction.

Indices monitoring trend in output and new business climbed for the second month in a row, signaling an easing in their respective downturns, S&P said.

Companies continued to scale back production in response to reduced intakes of new work from both domestic and overseas clients. Business volumes decreased for the eighth straight month as both domestic and foreign orders deteriorated.

Tariff uncertainty, government policy and global market turbulence were cited as reasons for further fall in new export orders. New orders from the EU and US markets decreased in May. Sentiment among manufacturers remained subdued but it rose to a three-month high. Firms were concerned about trade conditions, weak economic outlook and rising cost burdens.

Input price inflation eased to a five-month low in May. Part of the increase in costs was offset through higher selling prices.

".trading conditions remain turbulent both at home and abroad, making either a return to stabilisation or a sink back into deeper contraction likely during the coming months," S&P Global Market Intelligence Director Rob Dobson said.

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