(Reuters) – Exports of British factories have contracted at their highest rate in almost five years in April and the pressure on costs have intensified under the effect of American customs duties, according to the final PMI index for the sector published Thursday by S&P Global/CIPS.
The British manufacturing industry index was 45.4 in April, remaining below the 50.0 threshold which separates the growth in contraction for the seventh consecutive month.
However, this figure is higher than 44.9 in March and the preliminary reading of 44.0 published earlier this month.
Foreign demand for British manufactured products fell into the United States, Europe and China, and the data show that the rate of export decline has been the fastest since May 2020, during the Cavid-19 pandemic.
“At the start of the second quarter, the British manufacturing industry was shaken by unfavorable global market conditions, increasing costs on costs, deterioration in supply chains and increased commercial uncertainty,” said Rob Dobson, director at S&P Global Market Intelligence.
“The manufacturers interviewed noted that the announcements of American customs duties had a significant impact on the global markets, the trade partners adapting to increased commercial volatility,” he added.
The morale of manufacturing companies has fallen at its lowest level since November 2022, adds S&P Global.
The costs of inputs have increased to the fastest rate since December 2022, higher wage costs and uncertainties concerning the world supply chain that contributed to this increase.
The prices billed by companies have progressed to the fastest rate for more than two years.
The Bank of England (BOE), which should reduce its interest rates by a quarter of a point to 4.25% at its meeting next week, said that it was too early to know how customs duties would affect inflation.
The governor of the British central bank, Andrew Bailey, said they will probably have an impact on growth.
(Written by Suban Abdulla, Diana Mandiá)
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