UK Manufacturing Output Contracts in March

British manufacturing output contracted for the first time in six months in March, driven by escalating costs and supply chain disruptions from the Middle East conflict, according to the latest S&P Global Purchasing Managers' Index survey released on April 1.

The overall PMI reading fell to 51.0, down from 51.7 in February and below the preliminary estimate of 51.4. While the figure remained above the 50 threshold signaling expansion, the output sub-index dropped to 49.2 from 52.5 the previous month, marking the sector's first decline since September. New orders grew at a slower pace, though the trend suggested underlying demand held up better than production levels.

The survey highlighted severe pressures on input costs, which rose at the fastest rate since October 2022, reaching an index of 71.0. This represented a 15-point monthly jump, the largest since Britain's exit from the European Exchange Rate Mechanism in 1992, an event known as Black Wednesday. Nearly half of manufacturers, or 49 percent, reported higher purchase prices, compared to just 2 percent noting decreases. Rising oil and gas prices, coupled with elevated transportation expenses, fueled the surge, as the...