UK PMI Manufacturing was finalized at 43.0 in August, down from 45.3 in July. This marks the lowest level since May 2020, underscoring the frailty in the sector. S&P Global highlighted that the demand slackened due to weaker domestic and export conditions. Interestingly, purchase prices have also declined at their fastest rate since January 2016.
Rob Dobson, Director at S&P Global Market Intelligence, described the situation as a “deepening of the UK manufacturing downturn,” with the latest PMI reaching a 39-month low. He drew attention to the severity of the contraction rates in output and new orders, which he said are “rarely seen outside of major periods of economic stress, such as the global financial crisis of 2008/09 and the pandemic lockdowns.”
Dobson elaborated on multiple economic headwinds affecting demand, including rising interest rates, the ongoing cost-of-living crisis, export losses, and overall market outlook concerns. These conditions have forced manufacturing firms into a “more defensive posture,” with cutbacks in purchasing activity, inventory holdings, and staffing levels as they focus on controlling costs and maintaining margins.
