UK manufacturers have said that the Red Sea crisis has rocked factories and production has plummeted as a result.
The S&P Global/CIPS UK manufacturing PMI survey has revealed that production dropped for the 12thmonth in a row.
The survey shows that there was an increase to 47.5 in February compared to the reading in January of 47, anything below 50 shows that activity is contracting.
Factories across the UK have felt the impact of the Red Sea crisis which is responsible for slowing production and deliveries.
Rob Dobson, director at S&P Global Market Intelligence said, “Several manufacturers noted that they faced the difficult choice between accepting delays from rerouted shipping or facing the prospect of paying higher prices to source from closer to home.”
Dobson added, “Although the supply impact and effect of prices is muted by standards seen at the height of the pandemic, any upward pressure on inflation will be a concern to policymakers and may add to calls that it is too early to be confident on the timing of interest rate cuts.”
Cara Haffey, manufacturing and automotive lead at PwC UK, said, “Manufacturers are continuing to do their best to circumvent these issues, as vendors and suppliers test the agility of their supply chains by sourcing alternate routes.
“However, rerouting supplies, such as around southern Africa, as well as sourcing more local suppliers both carry added cost implications – which will not be welcome news for the sector.”
