UK January final manufacturing PMI 48.3 vs 48.2 prelim

• Prior was 47.0

Key Findings:

• Output, new orders and employment all contract
  further
• Input price inflation hits two-year high

Comment:

Rob Dobson, Director at S&P Global Market Intelligence:

“The start of 2025 has seen the downturn in the UK
manufacturing sector continue. Factory output, new
orders and employment all fell further in January as
companies faced weak market demand, rising costs and a
deteriorating outlook.”

“The latest survey also suggests that this retrenchment
is being hardest felt among small companies. Large-
sized manufacturers fared better, seeing output and new
orders recover during January.”

“There nevertheless seems little scope for any imminent
improvement in performance across the board. Demand
conditions remain weak in both domestic and overseas
markets, cost pressures are rising and will likely continue
to do so as changes to the minimum wage and employer
NI announced in last year’s Budget feed through.”

“Business
optimism consequently remains close to December’s
two-year low, while input price inflation has spiked to a
two-year high.
A stagnant economy and rising cost burdens leave
policy makers with a real dilemma, balancing the need
for rate cuts to support flagging growth and a declining
labour market against the need to contain inflationary
pressures.”

This article was written by Giuseppe Dellamotta at www.forexlive.com.