UK manufacturing downturn continues in August
By Michele Maatouk
Date: Monday 01 Sep 2025
(Sharecast News) - The downturn in the UK manufacturing sector continued in August, according to a survey released on Monday.
The S&P Global manufacturing purchasing managers' index fell to 47.0 from July's six-month high of 48.0. It was below the 50 mark that separates contraction from expansion for the eleventh month in a row.
The main factor underlying manufacturing sector weakness was a slump in new work intakes. New orders contracted at the fastest pace in four months and to one of the greatest extents seen over the past two years.
Lower new work inflows were put down to subdued client confidence, cost caution following increases to minimum wages and employer NICs and tariff uncertainties.
Rob Dobson, director at S&P Global Market Intelligence, said: "Production volumes are still showing resilience in the face of global geopolitical uncertainty and US tariff policies, with both July and August having seen only slight contractions that were milder than those suffered earlier in the year. Business confidence has also lifted to a six-month high, reflecting hopes that the trading environment is starting to settle down.
"However, August also saw a steep drop in UK manufacturers' new orders, with total order books and overseas demand both falling at some of the fastest rates seen over the past two years. 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 tenth successive month, with factory headcounts dropping to one of the greatest extents post pandemic.
"The outlook for the sector therefore clearly remains very uncertain. With manufacturers fearing that possible government policy decisions, including potential tax increases, could further hurt their competitiveness in domestic and export markets, the upcoming Budget will likely prove very important in guiding business confidence about the year ahead."
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