"The rise in manufacturing PMI to above 50, the first time since September 2024, has certainly come as a welcome surprise, suggesting that there are tentative signs that the sector may be turning a corner. However, l onger term t he sector continues to suffer from weak global demand and competition from overseas. Domestically policy uncertainty has put a hold on hiring and t he additional increase to minimum wage confirmed in last week Budget"
"And despite the initial positive reception to the announcement of the Industrial Strategy in June, no tangible measures were announced during the Budget that went to the heart of the significant challenges around the gravity of the UK's lagging productivity and competitiveness. On the plus side the Chancellor announced plans to cut manufacturers' energy costs by up to 25% from April 2027 which adds to the relief for high energy users already announced"
Manufacturing PMI rose above 50 for the first time since September 2024, indicating tentative recovery signs. The sector still faces weak global demand and stiff overseas competition. Domestic policy uncertainty has stalled hiring, and the confirmed minimum wage increase plus the salary sacrifice cap are likely to discourage new hires and entrepreneurship. Skills development commitments do not address a critical skills shortage that constrains growth. The Budget offered no tangible measures to tackle lagging productivity and competitiveness. Energy cost cuts up to 25% from April 2027 were announced, but timing may be too late for planned net-zero investments. Regional growth funding was welcomed, yet incentives for manufacturers to grow and invest remain limited.
Read at London Business News | Londonlovesbusiness.com
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