S&P Global: UK factory activity contracts for 8th month

UK manufacturing sector remained in contraction in May, though the pace of decline slowed, offering tentative signs of stabilisation.

The S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) rose to a three-month high of 46.4 from April’s 45.4, remaining below the 50 threshold that separates growth from contraction.

The index signalled deteriorating conditions for the eighth consecutive month, weighed by weak global demand, rising input costs, and trade uncertainty. Output, new orders, employment, and purchasing activity all declined, with smaller firms particularly hard hit.

Foreign demand fell for the 40th straight month, though at a slower pace, amid subdued orders from the EU and US. Supply chain issues persisted, with vendor lead times lengthening due to port disruption and tariff concerns.

Despite the downturn, modest improvements in new orders and production, along with a five-month low in input cost inflation, hinted the sector may be approaching a turning point. Still, only 49 per cent of firms expect output to rise over the next year, with small manufacturers reporting near-record low optimism.

Attribution: Amwal Al Ghad English
Subediting: M. S. Salama