Britain's manufacturing contraction eases in July but outlook remains weak
The July PMI was slightly higher than 47.7 in June, but the index has now signalled contraction for ten consecutive months. S&P Global noted that risks persist, including fragile domestic and overseas market conditions, subdued consumer confidence, and manufacturers' ongoing concerns about costs.
Market conditions remained subdued in July as British manufacturers reported weak spending willingness and low confidence at home and abroad.
Rob Dobson, director at S&P Global Market Intelligence, said although the UK manufacturing sector is starting to send some tentatively encouraging signals, there's no assured path back to strong growth. Domestic clients are unwilling to spend due to cost rises triggered by higher minimum wages and employer national insurance contributions, while export markets are being buffeted by geopolitical stresses as well as trade and tariff uncertainties.
The data also showed that new export orders have decreased over the past three and a half years.
Additionally, the sector faced a weak labor market in July. The company attributed this to a combination of weak demand, rising staff costs, and subdued market confidence. Job losses were recorded for the ninth month in a row, with the pace of reductions over the past six months ranking among the sharpest since 2020, when the country was hit by the COVID-19 pandemic.
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