• Prior 51.7

Key findings:

• Input price inflation hits 41-month high
• Suppliers’ delivery times lengthen to greatest extent since mid-2022
• Production falls for first time in six months as input price inflation spikes and supply chain stress grows

Comment:

Rob Dobson, Director at S&P Global Market Intelligence:

“UK manufacturing output contracted for the first time in six months in March, as the war in the Middle East and ongoing concerns about domestic economic policy led to a scaling back of production.

“The impact of the war also caused noticeable shifts in the cost and supply chain backdrops. Delivery times lengthened to the greatest extent since mid-2022, while the acceleration in input price inflation was the steepest since the aftermath of the UK’s withdrawal from the ERM in 1992. The resulting high-cost environment and shortages of inputs were also factors stymieing production volumes.

“The darker economic and geopolitical backdrop is also weighing on business confidence and hiring trends. Optimism about the year ahead has slumped to a six month low and the latest round of job cuts is the deepest since last September.

“The one possible positive is that, despite rising at a slower rate, the trend in new order inflows held up better than production. This suggests that the drop in production is currently more of a supply issue than one caused by an outright downturn in demand, though it’s hard to see how demand can prove resilient in the face of current high energy prices and economic uncertainty unless there’s a swift resolution to the war in the Middle East.”

This article was written by Giuseppe Dellamotta at investinglive.com.