UK manufacturing sector expanded at a slower pace in September, with the PMI finalizing at 51.5, down from 52.5 in August.
According to Rob Dobson, Director at S&P Global Market Intelligence, the sector continues to expand at a “solid, albeit slightly slower, pace,” supported by steady domestic demand. However, growing concerns are emerging, as business confidence for the year ahead has dropped to its lowest level in nine months.
The decline in optimism was notable, with only March 2020, just before COVID lockdowns, seeing a sharper fall. Uncertainty surrounding government policy ahead of the Autumn Budget is weighing heavily on sentiment, alongside broader concerns about global geopolitical risks and economic growth risks.
Inflationary pressures have intensified, with input cost inflation reaching a 20-month high. Manufacturers are being forced to raise prices as a result, with rising freight costs cited as a major contributor. Ongoing supply chain disruptions, driven by the Red Sea crisis and global conflicts, are exacerbating these price increases, keeping inflationary pressures elevated across the sector.
