UK Manufacturing PMI Drops Below Expectations, Contraction Continues

The UK's S&P Global Manufacturing PMI for August dropped to 47.3 from 48.0, a decrease of 0.7 points. The actual result was lower than the estimated 48.3, indicating a contraction in the manufacturing sector. This may exert downward pressure on industrial and manufacturing stocks and influence longer-term policy expectations.

The UK's S&P Global Manufacturing PMI for August dropped to 47.3 from 48.0, signaling a contraction in the manufacturing sector. This decrease of 0.7 points was lower than the estimated 48.3, indicating a slower pace of economic growth in the manufacturing sector [1].

The drop in the PMI score was primarily driven by a weakening in the manufacturing PMI, which fell to 47.3 from 48.0, further below the 50.0 growth threshold. This marks the lowest reading in three months and reflects the ongoing impact of the global trade war led by U.S. President Donald Trump [1].

The services sector, however, showed resilience, with the PMI for services rising to 53.6 from 51.8, topping market forecasts of 51.8 [2]. The overall UK S&P Global Composite PMI rose to 53 in August, ahead of expectations that it would inch higher to 51.6 [2].

The manufacturing sector's contraction may exert downward pressure on industrial and manufacturing stocks. Investors and financial professionals should closely monitor the situation, as it could influence longer-term policy expectations and economic growth forecasts [1].

References:
[1] Reuters. (2025, August 21). UK firms report strongest activity year in August PMI survey. Retrieved from https://www.reuters.com/world/uk/uk-firms-report-strongest-activity-year-august-pmi-survey-2025-08-21/
[2] Seeking Alpha. (2025, August 21). UK Services PMI Beats Forecasts; Manufacturing Slips Further in August. Retrieved from https://seekingalpha.com/news/4487760-uk-services-pmi-beats-forecasts-manufacturing-slips-further-in-august