Factory production has slumped, and manufacturers are “hunkering down” as they preparing for soaring costs and global disruption with trade amid Donald Trump’s tariffs war.
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The S&P Global UK manufacturing PMI survey has shown a reading in March of 44.9 down from 46.9 in February, any reading above 50 shows activity is growing.
UK factory production has hit an 18-month low and the score for March is the lowest since October 2023.
Rob Dobson, director at S&P Global Market Intelligence, said: “Companies are being hit on several fronts.
“Many reported that domestic market conditions are deteriorating, costs are rising due to changes in the national minimum wage and national insurance contributions, geopolitical tensions are intensifying, and global trade faces potential disruptions from tariffs.
“The outlook is also darkening, with overall business optimism plunging to its lowest levels since late 2022.
“Many firms are clearly hunkering down as they expect difficulties to continue in the coming months.”
James Brougham, senior economist for manufacturing trade group Make UK said the Prime Minister “must sit up exceptionally straight and pay attention to a rapidly deteriorating situation for manufacturers.
“Unlike the last trough in activity in mid-2023 that was induced by the acute pressures of the energy crisis at the time, this is being driven predominately by a steady and consistent decline in new orders for the sector – highlighting both the retreat in demand for the UK sector’s goods compounded with the effects of global economic policy uncertainty and potential tariffs.
“This is an endemic challenge when compared to the woes of previous years.”
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