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\t\tManufacturing has suffered yet another downturn in activity over September. ( Photographer: Krisztian Bocsi\/Bloomberg via Getty Images)\t<\/p>\n\t\t\tWednesday 01 October 2025 10:32 am
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\t\t\tWednesday 01 October 2025 10:40 am\n\t<\/p>\n
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\t\tManufacturing has suffered yet another downturn in activity over September. ( Photographer: Krisztian Bocsi\/Bloomberg via Getty Images)\t<\/p>\n
A breakdown in activity across the manufacturing sector has deepened as new data has shown export work coming to a halt and investment falling flat.\u00a0<\/p>\n
S&P Global\u2019s purchasing managers\u2019 index (PMI) for manufacturing in September showed the sector was still struggling to bounce back despite some quiet optimism in recent months.\u00a0<\/p>\n
Activity in the sector dropped to a five-month low due to a drop in orders at one of the \u201cgreatest extents in the past two years\u201d, with the PMI reading falling to 46.2 \u2013 significantly lower than the 50-figure benchmark for neutrality in output.\u00a0<\/p>\n
Disruption caused by a cyber attack on Jaguar Land Rover<\/a> had ripple effects on the wider manufacturing sector, according to researchers.\u00a0<\/p>\n Tariffs<\/a> and high energy costs also weighed down on the confidence of clients. <\/p>\n S&P Global pointed out that export orders from all of the US, the EU, the Middle East and Asia had declined at one of the quickest paces in years.\u00a0\u00a0<\/p>\n Manufacturing output \u2018similar to pre-2008 levels\u2019<\/p>\n Employment also fell for the eleventh consecutive month due to the pressures of a higher national minimum wage and Rachel Reeves<\/a>\u2019 hike to employers\u2019 national insurance contributions (NICs).\u00a0<\/p>\n Rob Dobson, a director at S&P Global Market Intelligence, said new data provided \u201cfurther worrying news for the health of UK industry\u201d.\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tConstruction sector hit by waning activity ahead of Budget<\/a><\/p>\n \u201cManufacturers are facing an increasingly challenging environment, with intakes of new business and levels of production hit by weak market sentiment, a dearth of new export work and a high-cost environment exacerbated by tax and labour cost rises,\u201d Dobson said.\u00a0<\/p>\n \u201cCompanies entwined into the autos supply chain are also facing a temporary hit to activity following the cyber-attack on JLR.\u201d<\/p>\n \u201cConfidence about the next 12 months remains at a relatively subdued level, job losses have been recorded in each of the past 11 months, and a further cut in purchasing activity is symptomatic of a focus on trimming non-essential spending.\u201d<\/p>\n One set of good news was that the rise in cost prices had slowed and could allow for interest rate cuts<\/a> to \u201chelp offset any higher taxes announced in November\u2019s Budget\u201d, Dobson added.\u00a0<\/p>\n Martin Beck, chief economist at WPI Strategy, said some of the weaknesses highlighted \u201cmay be overstated\u201d as the attack on JLR could be a \u201ctemporary blow\u201d and the PMI may exaggerate the risks in times of high uncertainty before Budgets.\u00a0<\/p>\n But Beck said: \u201cThe bigger picture is harder to ignore. The official measure of UK manufacturing output is barely higher than before the financial crisis all the way back in 2008.\u00a0<\/p>\n \u201cUK firms are paying the highest industrial electricity prices in the developed world, while carmakers in particular are being squeezed by the government\u2019s net-zero mandate, aggressive Chinese competition and US trade policy.\u201d<\/p>\n \u201cManufacturing accounts for only 10 per cent of the UK economy<\/a>, so the direct drag of the sector\u2019s weakness on GDP is modest. But its role in driving innovation and productivity means persistent manufacturing weakness risks leaving broader scars on the UK\u2019s long-term growth prospects.\u201d<\/p>\n \t\t\t\t\tRead more<\/p>\n