UK factory activity expands in March for the first time since mid-2022

Factory sector activity expanded last month for the first time since July 2022, according to the results of a closely followed survey.

S&P Global's manufacturing sector Purchasing Managers' Index rose from a reading of 47.5 for February to 50.3 in March (Preliminary: 49.9).

Economists had expected the PMI to be unchanged at 49.9.

For both the headline PMI and the subindices the 50.0 point level marks the threshold between a contraction and an expansion.

Subindices for new orders, output and suppliers' delivery times were all consistent with an improvement in overall operating conditions in March, the survey compiler said.

The return to growth in the former two of those subindices however was described as "hesitant" by Rob Dobson, director at S&P Global Market Intelligence.

Subindices for employment and stocks of purchases were still pointing to ongoing downturns, but the rates of decline eased sharply in comparison to the prior month.

"Potential blockers remain such as continued weak export performance and supply chain stresses, with the neighbouring EU market the main drag on overseas demand and the Red Sea crisis still impacting supply chains," Dobson added.

"Signs from the survey that the impact of both of these factors is easing is therefore welcome news."