UK PMI Manufacturing was finalized at 47.5 in February, up from January’s 47.0. This marks the highest reading since April 2023, yet the sector has been contracting for 19 consecutive months.
Rob Dobson, Director at S&P Global Market Intelligence, said the impact of the Red Sea crisis was particularly pronounced, causing delays in raw material deliveries, inflating purchase prices, and impairing production capabilities. This crisis also had a knock-on effect on demand, with new export orders suffering due to supply chain disruptions and escalated shipping costs.
The crisis has exerted considerable pressure on both prices and supplies. Input cost inflation reached an 11-month high, necessitating further increases in selling prices, while average supplier lead times extended to the greatest extent since mid-2022.
Dobson suggests that this inflationary pressure may prompt policymakers to reconsider the timing of anticipated interest rate cuts, hinting at the broader economic implications of the manufacturing sector’s current challenges.
Full UK PMI manufacturing release here.
