UK manufacturing orders deteriorated to -45, the weakest level since September 2020

⑴ Data released by the Confederation of British Industry on Tuesday showed that the manufacturing orders balance index fell further from -41 in May to -45 in June, reaching its lowest level since September 2020 during the COVID-19 pandemic, indicating that the trade environment faced by the manufacturing sector is rapidly deteriorating. ⑵ The output expectations balance index for the next three months dropped sharply from the previous -13 to -31, the lowest since December 2024, signaling a significant rise in pessimism among manufacturers about short-term production prospects. ⑶ The output price expectations balance index fell from +38 in May to +22, indicating that while cost pressures faced by manufacturers have eased somewhat, the absolute level remains high. This trend is consistent with the evolution of price pressures in the services sector found in previous S&P Global surveys. ⑷ Senior economists at the Confederation of British Industry pointed out that manufacturing orders are at their weakest level since 2020 and output continues to decline. The reopening of the Strait of Hormuz brings favorable conditions for British manufacturers, but normalization of energy prices and supply chains will still take time even under the best circumstances, and the potential for further turbulence remains clearly visible.