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United Kingdom PMI March 2024

United Kingdom: UK manufacturing PMI reaches 20-month high in March

The S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) rose to a 20-month high of 50.3 in March from 47.5 in February. As a result, the index moved above the 50.0 no-change threshold, and signaled an improvement in manufacturing sector operating conditions compared to the previous month.

The key drivers behind the latest PMI reading were the increases in manufacturing output and new orders, which both returned to growth in March after year-long downturns. This recovery was primarily fueled by strengthened domestic demand, as new export orders continued to fall. Softer declines in employment and stocks of purchases were further signs of stabilization within the manufacturing sector.

March saw a significant improvement in optimism among UK manufacturers. Business optimism rose to its highest level since April 2023, with 58% of manufacturers expecting an increase in production levels over the coming 12 months, compared to only 7% anticipating a contraction. This improved sentiment was attributed to signs of stronger demand, new product launches, and a better overall outlook for the sector. Finally, input price pressures rose in March, feeding into higher output prices.

Rob Dobson, director at S&P Global Market Intelligence, said:

“Potential blockers remain such as continued weak export performance and supply chain stresses, with the neighbouring EU market the main drag on overseas demand and the Red Sea crisis still impacting supply chains. Signs from the survey that the impact of both of these factors is easing is therefore welcome news.”

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