UK manufacturing experiences worst performance in 18 months

Britain's manufacturing sector is facing its worst decline in 18 months. This downturn is attributed to Labour's recent tax increases and former President Trump's trade policies. A survey shows that UK factories are struggling more than those in Germany and France. The purchasing managers’ index (PMI) for March recorded a score of 44.6 for manufacturing. This is a significant drop from February's score of 46.9. A score below 50 indicates contraction in the industry. Chris Williamson from S&P Global Market Intelligence noted that businesses are facing difficulties due to high costs, low confidence, and sluggish demand both at home and abroad. Chancellor Rachel Reeves is expected to present downgraded economic forecasts in her upcoming Spring Statement. Companies are preparing for the impact of a £25 billion rise in National Insurance and an increase in the minimum wage, both effective in early April. Additionally, Trump's tariffs have disrupted global trade. In contrast, the UK’s services sector is doing better, with a March score of 53.2, marking a seven-month high. This part of the economy includes areas such as law, accounting, and hospitality, accounting for a large portion of the UK’s overall economic output. Despite the poor performance in manufacturing, the uptick in services may provide some relief for Chancellor Reeves.