Demand for British exports declined at the fastest pace since April, when US President Donald Trump announced his global tariffs, according to a closely watched survey.
S&P Global’s purchasing managers’ index declined to 51 from a one-year high of 53.5 registered in August, according to provisional estimates published Tuesday (Sept 23). The reading remained above the 50 threshold, indicating growth, but was below the 53 expected by economists.
The reading was dragged lower by both services and manufacturing, with the slump in factory output intensifying this month. S&P’s gauge of total new orders from abroad recorded its worst reading in five months and firms reported weaker sales to the US and Europe.
Survey respondents cited “weak order books from both domestic and export markets. There were also some specific mentions of lower manufacturing output across the automotive supply chain as a result of plant stoppages at Jaguar Land Rover,” S&P Global said.
The report highlights the lasting damage of US tariffs, even though UK exports face lower barriers than most countries. It underscores Chancellor of the Exchequer Rachel Reeves’ challenge to fill another hole in the public finances at the Nov 26 budget as growth remains elusive and geopolitical tensions intensify. Firms are also turning less optimistic about their prospects in the year ahead amid mounting speculation of tax rises.
“Alarm bells should be ringing that the economy is faltering, which could help shift the policy debate at the Bank of England back towards a more dovish stance,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Firms reported easing pressure from input-price growth, which slowed from the three-month high last month. However, survey respondents cited efforts by suppliers to pass on higher employment costs, as well as rising energy bills and food prices.
Manufacturing output declined at the fastest pace since March, while services activity grew at a slower pace due to weak domestic conditions and heightened geopolitical tensions. Employers continued to scale back jobs to cope with higher costs and lower workloads, with employment declining for the 12th consecutive month.
Source: theedgemalaysia