UK manufacturing downturn continues as new orders slide; Profits surge at Royal Mail – business live

Weak market conditions, US tariffs and downbeat client confidence blamed for drop in factory orders

Ouch! The UK manufacturing sector shrank again last month, as factories were hit by weaker demand at home and abroad.

The latest monthly poll of purchasing managers across Britain’s manufacturing sector found that new orders and new export business both fell at quicker rates in August, leading to another drop in production volumes.

“Production volumes are still showing resilience in the face of global geopolitical uncertainty and US tariff policies, with both July and August having seen only slight contractions that were milder than those suffered earlier in the year. Business confidence has also lifted to a sixmonth high, reflecting hopes that the trading environment is starting to settle down.

However, August also saw a steep drop in UK manufacturers’ new orders, with total order books and overseas demand both falling at some of the fastest rates seen over the past two years. Weak market conditions, US tariffs and downbeat client confidence all contributed to the dearth of new contract wins. Job cuts were also reported for a tenth successive month, with factory headcounts dropping to one of the greatest extents postpandemic.