CONFIDENCE in British manufacturing has suffered its biggest drop since the start of the pandemic, new research said today.
Analysts said the government’s “gloomy messaging” ahead of the government’s Budget had fuelled uncertainty in the sector.
The closely watched S&P Global UK manufacturing PMI survey recorded a reading of 51.5 for September, down from 52.5 the previous month.
Scores above 50 mean the sector is growing and the drop is the largest seen since the onset of lockdown restrictions in March 2020.
The survey showed confidence falling amid cuts to employment, purchasing activity and stocks.
S&P Global Market Intelligence director Rob Dobson said that manufacturers have become “more nervous about the outlook, suggesting that the current spell of impressive growth is fading, with business optimism about the year ahead slumping to a nine-month low.”
He added: “The extent of the drop in confidence was striking, beaten only by that seen in March 2020 prior to Covid lockdowns.
“Uncertainty about the direction of government policy ahead of the coming Autumn Budget was a clear cause of the loss of confidence, especially given recent gloomy messaging, though firms are also worried about wider global geopolitical issues and economic growth risks.”
He warned that price pressures have also risen to a 20-month high and are “also becoming a more prominent feature of the survey and a reminder that the inflation genie is not yet back in the bottle.
“Freight cost rises are a big factor underlying the resurgence in the price measures, as supply chains continue to feel the strain of the Red Sea crisis and global conflicts.”
TUC general secretary Paul Nowak said: “After 14 years of Tory mayhem, it’s time the UK had an ambitious industrial strategy with a clear aim to protect and grow jobs.
“By bringing unions back to the decision table, the new Government can prioritise sustainable growth and future-proof hundreds of thousands of manufacturing jobs. That could make a real difference to people working in manufacturing across the country, including those working in chemicals in the North West, automotive in the West Midlands or fabrication yards in the North East.”
