Written by David Milliken
LONDON (Reuters) – A gauge of British manufacturing activity released on Monday showed the biggest drop in nine months, as orders from domestic and foreign customers fell and continued supply disruptions pushed up costs.
The S&P Global manufacturing Purchasing Managers’ Index fell to 48.0 in November from 49.9 in October – below the previous average of 48.6 and the 50 mark that separates growth from contraction.
S&P cited headwinds from a 25 billion pound ($32 billion) rise in employment taxes in the new Oct. 30 of the Labor government, a 7% British wage increase, disruption to Red Sea shipping and the threat of global tariffs.
“Manufacturers remain facing an environment of high costs, low demand and increased uncertainty for the foreseeable future,” said S&P managing director Rob Dobson.
“While companies of all sizes are experiencing the downturn, smaller companies are the most affected, reporting mainly declines in production, new orders and new export business,” he added.
Last week US President-elect Donald Trump said he plans to impose a 25% tariff on all goods the United States buys from Canada and Mexico and impose a 10% to 20% tariff on almost all imports.
Some businesses said customers are delaying or canceling investment projects because of rising costs following the budget and broader global uncertainty, S&P said.
Orders, output and employment all fell at the fastest pace in nine months.
Official data showed that British manufacturing prices in September were 0.7% lower than their level last year.
($1 = 0.7875 pounds)
