UK Manufacturing Downturn Deepens In March

(RTTNews) - UK manufacturing activity deteriorated at the fastest pace in seventeen months as the decline in output and new orders accelerated, final survey results from S&P Global showed on Tuesday.

The final manufacturing Purchasing Managers' Index dropped to a 17-month low of 44.9 in March from 46.9 in February. The reading was marginally above the flash score of 44.6.

A score below 50.0 suggests contraction. Operating conditions have deteriorated in each of the past six months.

Manufacturing production declined for the fifth straight month and at the quickest pace since October 2023. The downturn was widespread, with contractions signaled across all sub-sector definitions and all size categories.

New order intakes fell to the greatest extent for over one-and-a-half years and at one of the quickest rates since the pandemic and lockdown affected months of 2020, the survey said.

British manufacturers faced a challenging trade climate due to escalating geopolitical tensions, low customer confidence, and a slump in the economy in both home and foreign markets.

New export business contracted at the fastest pace since August 2023 amid lower intakes of new export work, which were mainly linked to weaker demand from the US and Europe.

In March, UK manufacturers continued to exercise extreme caution, which resulted in reductions in hiring, stock holdings, and purchase activities.

On the price front, input price inflation eased slightly from February's 25-month high, while selling prices rose at the quickest pace since April 2023.

"The outlook is also darkening, with overall business optimism plunging to its lowest levels since late 2022," Rob Dobson, Director at S&P Global Market Intelligence, said.

"Fears about current and future performance put manufacturers on an increasingly cost-cautious footing, with employment, stock holdings, and purchasing all falling as companies looked to work leaner and protect cash flow, margins, and competitiveness."