S&P Global UK’s Manufacturing Purchasing Managers’ Index (PMI) fell to a 17-month low of 44.9 in March, down from 46.9 in February. The PMI has now signalled a deterioration in overall operating conditions in each of the past six months.
March saw UK manufacturing production decline for the fifth consecutive month and at the quickest pace since October 2023. The downturn was widespread, with contractions signalled across all sub-sectors (consumer, intermediate and investment goods) and all company sizes, with small-scale manufacturers experiencing the steepest decrease in output.
Manufacturers reported a trading environment characterised by rising geopolitical tensions, weak client confidence and economic slowdown in domestic and overseas markets. Disruption to new orders was also caused by concerns about the forthcoming rises to the national minimum wage and employer national insurance, and the likelihood of tariffs.
New export business contracted for the 38th successive month in March, and at the quickest pace since August 2023. Lower intakes of new export work were mainly linked to weaker demand from the US and Europe. Some firms also noted reduced levels of new business from China, India and the Middle East.
Cost-caution has led to cutbacks in employment, stock holdings and purchasing activity. Staffing levels have been reduced for five consecutive months, although the rate of job losses eased since February's near five-year record. Cuts were linked to the economic backdrop, rising costs, non-replacement of leavers, redundancies and hiring freezes.
March also saw the rate of input price inflation ease slightly from February's 25-month high. There were reports of higher costs for chemicals, electronics, energy, metals, packaging, paper, timber and transportation, plus suppliers passing on increases to their own cost bases. Factory gate selling prices rose at the quickest pace since April 2023.
Commenting, Dan Farrell, Accenture’s Manufacturing & Engineering lead, Industry X, UK, said: “The further decline in the UK’s manufacturing PMI to a 17-month low reflects the growing pressures facing the sector. Weak demand and rising costs are hampering production, and economic uncertainty continues to weigh on confidence.
“Manufacturers will be focused on making their supply chains more resilient and improving operational efficiency to better adapt to a changing market. Advanced technologies such as data and AI, and robotics, are vital for achieving better resilience and productivity. Upskilling the workforce to make the most of new technologies will also be crucial to position the UK’s manufacturing sector for future recovery.”
“March’s UK Manufacturing PMI shows that sector optimism, which has remained markedly resilient for some time, is starting to show strain, as difficult operating conditions continue not only to persist but also to evolve,” added Cara Haffey, leader of Industry for Industrials and Services at PwC UK. “The additional and latest challenge posed by US trade tariffs is also beginning to come into sharp focus.”
Invinity to build 20MWh flow battery in UK
This is all about cost/energy density. Just work out how big a mechanical system would be compared to the flow battery. Unfortunately there is not...