BRITAIN'S manufacturing sector shrank again last month as factories were hit by a fall in demand at home and abroad, new figures showed today.

The latest monthly poll of purchasing managers found that manufacturing activity had fallen in August for the 11th consecutive month.

Factories blamed lower new work inflows on “subdued client confidence,” citing tariff uncertainties and cost increases.

The S&P Global UK manufacturing PMI survey, watched closely by economists, showed a reading of 47.0 in August, down from 48.0 in July.

Any reading above 50 indicates that activity is growing, while any score below means the reverse.

The latest reading was marginally worse than expected — economists having predicted a reading of 47.3 — and the worst for three months.

It represents a setback for the sector after signs of recovering activity earlier in the summer.

S&P Global Market Intelligence director Rob Dobson said that firms had witnessed a “steep drop” in new orders over August.

He said: “Weak market conditions, US tariffs and downbeat client confidence all contributed to the dearth of new contract wins.

“Job cuts were also reported for a 10th successive month, with factory headcounts dropping to one of the greatest extents post-pandemic.”

The research showed new orders had contracted “at the fastest pace in four months,” with manufacturers linking the decline to subdued client confidence and caution regarding costs following recent increases in the minimum wage and national insurance contributions.

New export business also decreased for the 43rd consecutive month as concerns over tariffs and wider trade tension impacted demand.

Surveyed companies predicted stronger production over the coming year.