(Il Sole 24 Ore Radiocor) - Milano, 1 apr - In March, UK's purchasing managers' index (PMI) for the manufacturing sector slipped to 51.0 in March from 51.7 in February and was below the flash estimate of 51.4, according to data released by S&P Global.

A reading above 50 signals expanding sector activity while one below a contraction.

S&P Global said that two of the PMI sub-components - new orders and suppliers' delivery times - were at levels normally consistent with an improvement in operating conditions. However, it noted that increased lead times in March were mainly the result of increased supply-chain stress resulting from the Middle East conflict as opposed to order books driving greater demand for suppliers' services. Production, employment and stocks of purchases sub-components of the index all contracted.

'UK manufacturing output contracted for the first time in six months in March, as the war in the Middle East and ongoing concerns about domestic economic policy led to a scaling back of production," commented Rob Dobson, director at S&P Global Market Intelligence.

"The impact of the war also caused noticeable shifts in the cost and supply chain backdrops. Delivery times lengthened to the greatest extent since mid-2022, while the acceleration in input price inflation was the steepest since the aftermath of the UK's withdrawal from the ERM in 1992. The resulting high-cost environment and shortages of inputs were also factors stymieing production volumes.

'The darker economic and geopolitical backdrop is also weighing on business confidence and hiring trends. Optimism about the year ahead has slumped to a six-month low and the latest round of job cuts is the deepest since last September.

'The one possible positive is that, despite rising at a slower rate, the trend in new order inflows held up better than production. This suggests that the drop in production is currently more of a supply issue than one caused by an outright downturn in demand, though it's hard to see how demand can prove resilient in the face of current high energy prices and economic uncertainty unless there's a swift.

resolution to the war in the Middle East.'

(RADIOCOR) 01-04-26 10:51:41 (0263) 5 NNNN