UK Manufacturing Output, Orders Contract Amid Global Trade Uncertainty

The UK manufacturing sector continued to face significant challenges in May, with the S&P Global UK Manufacturing PMI rising slightly to 46.4 from 45.4 in April, marking a three-month high but still indicating contraction for the eighth consecutive month. Weak global demand, turbulent trading conditions, rising costs including increased employer national insurance contributions and minimum wages, and low client confidence contributed to reductions in output, new orders, export business, and employment, with small-scale producers being particularly affected. Despite these challenges, there were tentative signs of improvement as indices monitoring output and new business showed a second consecutive month of easing downturns, suggesting the sector may be starting to turn a corner. Employment levels continued to decline, with job losses accelerating, especially among smaller manufacturers. Meanwhile, global trade uncertainties and tariff impacts remain a significant factor affecting manufacturing sectors worldwide, as highlighted by the ongoing U.S. tariff policies and their influence on supply chains and costs. Overall, although conditions remain tough, some indicators suggest a possible easing in the sector's contraction.