
The UK’s manufacturers continue to suffer as the threat of US president Donald Trump’s tariff policy hits new contracts from abroad.
According to the latest S&P Purchasing Managers’ Index (PMI), the UK manufacturing industry scored a 45.4 rating for the month of April. Any number below 50 represents an economic contraction.
This number was up from both the PMI flash estimate earlier this month, and March’s 44.9, but still registered its seventh straight month of decline.
Rising and falling
Manufacturers reported both rising costs and falling demand.
The prospect of US tariffs reportedly drained the confidence of both business and consumer clients, with many apparently refusing to commit to new orders.
“Anecdotal evidence indicated that weak client confidence, trade uncertainty (including prospective US tariffs) and generally quiet global markets had all weighed on export demand,” the report said.
New export business fell at the quickest pace for nearly five years, said Rob Dobson, director at S&P Global Market Intelligence. Manufacturers reported that the US tariffs were having a “noticeable impact on global markets”.
“The start of the second quarter saw UK manufacturing buffeted by adverse global market conditions, rising cost pressures, deteriorating supply chains and increased trade uncertainty,” he said.
Input cost inflation – the price of materials used in the manufacture of products – also rose to a 28-month high, as manufacturers faced a rough overall environment.
Mixed global picture
Confidence also fell in other markets. Canada’s manufacturing industry suffered its most challenging month in five years, while US growth in the sector slowed considerably (registering only a 50.2).
However, the Eurozone had its second successive increase in monthly output last month, quickening to its strongest in just over three years. Greece and Ireland had the fastest improvement, while Italy, Germany and France had softer reductions than the previous month.
India posted a strong month in April, scoring a 58.1, and enjoyed the second-fastest upturn in exports for 14 years.
Pranjul Bhandari, chief India economist at HSBC, said that this increase in export orders might “indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and US tariff announcements”.