UK manufacturers face downturn as orders decline and jobs cut

In November 2024, manufacturers throughout Europe experienced a significant decline in demand, signaling ongoing challenges within the sector. The S&P Global purchasing managers’ index (PMI) for the eurozone fell to 45.2, indicating a contraction, with France, Germany, and Austria particularly affected. France's PMI dropped from 44.5 to 43.1, while Germany saw the most severe decline in output. In the UK, factory owners faced the first decrease in output in seven months as the PMI tumbled to 48, driven by falling domestic orders and impact from Brexit-related border checks. Job reductions and cuts in investment were common as manufacturers struggled with high costs and low demand. The economic landscape for UK manufacturers has worsened, contributing to a deteriorated outlook for 2025 amidst rising geopolitical tensions. Economic policies such as increased employer national insurance and higher minimum wages are anticipated to further raise manufacturing costs. Analysts have described the situation as a “perfect storm” for the sector, with domestic and international factors leading to weaker business confidence and decreased exports. Trade challenges include delays at ports due to Brexit, which have disproportionately impacted smaller businesses and compelled them to source manufactured goods from within the eurozone instead. The manufacturing decline in Europe correlates strongly with global supply chain issues, exacerbated by delays in U.S. ports and complications in the Middle East. Countries such as Italy and France have recorded fast contractions, with the latter facing political turmoil that has further complicated manufacturing dynamics. The two-and-a-half-year downturn reflects persistent issues that have yet to show signs of recovery, with experts warning of a prolonged recession for the manufacturing sector in the eurozone. Overall, the combination of reduced orders, rising operational costs, and external market pressures leaves manufacturers in a precarious position. The situation is compounded by reduced confidence following governmental budget announcements aimed at economic rejuvenation. As both domestic and international demand continue to contract, the future for manufacturing remains uncertain, with calls for more substantial action to support the struggling sector from industry advocates and analysts alike.