The UK manufacturing sector showed mixed signals in March, with output returning to contraction despite the overall PMI remaining in expansion territory, according to the latest survey.
The Manufacturing PMI eased to 51.0 from 51.7 in February, staying above the 50 mark for the fifth straight month. However, production declined for the first time in six months, mainly due to reduced output in the intermediate goods sector. Manufacturers scaled back activity amid rising uncertainty linked to geopolitical tensions, the Middle East conflict, and domestic policy concerns.
New orders continued to grow for the fourth consecutive month, although at a slower pace. Export demand also increased, supported by orders from key global markets. Despite this, business confidence dropped sharply, with outlook expectations falling to their lowest level since September 2025.
Supply chain pressures intensified significantly. Delivery times lengthened at the fastest rate in over four-and-a-half years, largely due to disruptions linked to the Middle East conflict. This added to existing logistical challenges.
Cost pressures surged, with input prices rising at the quickest pace since October 2022, driven by higher energy, oil, and gas prices. Nearly half of firms reported increased costs. Selling prices also rose sharply, but many companies faced margin pressure.
Employment declined at a faster rate, as firms remained cautious about hiring amid rising costs and uncertainty.