UK manufacturing PMI falls to 17-month low

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.