UK manufacturing output, new orders, new export biz, jobs fall in May
The UK manufacturing sector continued to face tough operating conditions in May, as weak global demand, turbulent trading conditions and rising cost burdens led to reduced levels of output, new orders, new export business and employment, purchasing managers' index (PMI) data show.
The seasonally-adjusted S&P Global UK manufacturing PMI rose to a three-month high of 46.4 in May, up from 45.4 in April and above the earlier flash estimate of 45.1.
The PMI has indicated a deterioration in operating performance in each of the past eight months.
The UK manufacturing sector continued to face tough operating conditions in May, as weak global demand, turbulent trading conditions and rising cost burdens led to reduced levels of output, new orders, new export business and employment, PMI data show. Total new business volumes decreased for the eighth month running. Small-scale producers were being hit especially hard by the downturn.
Four out of the five PMI components in May—output, new orders, employment and stocks of purchases—were consistent with contraction, a release from S&P Global Ratings said.
UK manufacturing production contracted for the seventh consecutive month in May, as companies scaled back production in response to reduced intakes of new work from both domestic and overseas clients.
Total new business volumes decreased for the eighth month running, amid reports of a general reluctance among clients to commit to new contracts.
Weak global market conditions, trade uncertainty, low customer confidence and cost pressures resulting from recent increases to UK employer national insurance contributions and minimum wages also contributed to clients' reluctance to spend.
However, a recent bout of good weather did boost sales for some manufacturers. The downturns in output and new orders remained widespread by both sub-sector and company size definitions in May.
There were signs that small-scale producers were being hit especially hard by the downturn, seeing the steepest drops in both production and new business.
Tariff uncertainty, government policy and global market turbulence were all mentioned by panelists as factors underlying a further decrease in new export orders during May.
Foreign demand fell for the fortieth successive month. Weaker inflows of new work were reported from the EU and US markets.
May 2025 saw business confidence remain subdued by the historical standards of the survey, despite recovering to a three-month high. Manufacturers continued to raise concerns that turbulent trade conditions, the weak economic outlook and rising cost burdens will make market conditions tough during the year ahead.
Forty-nine per cent of survey respondents forecast growth of production volumes over the next 12 months, compared to 13 per cent expecting a contraction.
Confidence levels were lowest at small-scale producers (dipping to a near record low), while optimism rose at both medium and large-sized firms.
Lacklustre conditions at present combined with an increasingly uncertain outlook fixed manufacturers on a cost-conscious course during May.
Employment, purchasing activity, input stocks and finished goods inventories were all lowered.
Supply chains remained under stress, with average vendor lead times lengthening to the greatest extent during the year so far. This was linked to port disruption, tariff uncertainty and material shortages.
Input price inflation eased to a five-month low in May. Manufacturers seeing costs increase blamed higher energy costs, tariffs, freight prices and the pass-through of greater cost burdens by suppliers.
Fibre2Fashion News Desk (DS)
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