UK manufacturing growth picks up as Trump tariff chaos eases
UK manufacturing growth picks up as Trump tariff chaos eases. Factories in upbeat mood despite fears over economic impact of US war on Iran, poll finds.
Intelligence analysis by Llama
UK manufacturing growth picks up as Trump tariff chaos eases. Factories in upbeat mood despite fears over economic impact of US war on Iran, poll finds. The S&P Global purchasing managers’ index dipped in July, but maintained a run of nine months of expansion.
The UK manufacturing industry is doing better than expected. Factories are making more things and hiring more people. However, there are still concerns about the future, especially with the US war on Iran.
Analysis
A $60B Vote of Confidence
The recent S&P Global purchasing managers’ index (PMI) has shown a dip in July, but maintained a run of nine months of expansion. This is a positive sign for the UK manufacturing sector, which has been hit hard by the election of Donald Trump and the president’s “liberation day” tariffs that took effect in the spring last year. The industry received a second big blow last autumn when a hack of the computer system at Jaguar Land Rover brought production at the UK’s largest car manufacturer to a halt.
Why Cursor?
Uncertainty about the future dragged on the labour market in July. Although staffing levels increased for the fourth successive month, the rate of growth eased to near-stagnation and was the weakest during the current upturn. This is a concern for the industry, as it may indicate that companies are not confident in the future of the industry.
The Road Ahead
The recovery has led to only a small increase in employment. Companies are likely to take on more staff as the influx of new business causes backlogs of work. However, this would be assisted if business optimism recovers from its current subdued level. Progress relating to geopolitics, global trade tensions, and the direction of the new UK government’s industrial and tax policies will aid, and not hinder, this process.
Key points
- UK manufacturing growth picks up as Trump tariff chaos eases
- Factories in upbeat mood despite fears over economic impact of US war on Iran, poll finds
- The S&P Global purchasing managers’ index dipped in July, but maintained a run of nine months of expansion
- Uncertainty about the future dragged on the labour market in July
- The recovery has led to only a small increase in employment
If the US war on Iran is resolved quickly, the UK manufacturing industry could see a significant boost in growth. This would lead to more jobs and higher production levels.
If the US war on Iran continues, it could lead to a significant increase in oil and gas prices. This would filter through into higher business costs and could lead to a decline in the manufacturing industry.
