British manufacturing activity growth slowed in June from May’s 22-month high, as ongoing disruptions to shipping in the Red Sea contributed to lower demand from overseas customers, according to a survey released on Monday. The S&P Global’s UK Manufacturing Purchasing Managers’ Index (PMI) dropped to 50.9 in June from 51.2 in May. The final reading was lower than the 51.4 recorded in the provisional June data.
S&P Global noted that the overall picture remains positive, with output and new orders both rising. However, employment fell, delivery times lengthened, and manufacturers’ input costs rose at the fastest pace since January 2023. “Shipping issues resulting from the Red Sea crisis, low stocks at suppliers, insufficient vendor capacity, and port issues all led to longer lead times,” S&P Global reported.
Despite output and overall new orders growing at close to their fastest pace in two years, export orders fell for the 29th consecutive month, primarily due to shipping delays and high freight costs. The disruptions to international shipping have been ongoing since November, caused by attacks launched by Yemen’s Houthi militants, an Iran-aligned group. These attacks are claimed to be in solidarity with Palestinians in the conflict between Israel and the militant Islamist group Hamas. Many vessels have opted to avoid the Red Sea route to the Suez Canal, instead taking the longer journey around the southern tip of Africa.
Economic Context
Official figures released on Friday showed Britain’s manufacturing sector, which accounts for 10% of the economy, grew at a quarterly pace of 1.1% in the first three months of 2024. This represents the second-strongest quarterly expansion since the start of 2021. However, goods export volumes fell by 3.5% in the first quarter. The Office for National Statistics attributed this decline largely to trading in non-monetary gold, an erratic item that often distorts British trade statistics.
Need for Supply Chain Visibility Software
To mitigate the impacts of such disruptions, the implementation of supply chain visibility software is crucial. Real-time data insights provided by this technology can assist Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) in making critical business decisions. By leveraging these insights, stakeholders can effectively manage disruptions, anticipate delays, optimise routing, and adjust to changing conditions, ensuring smoother operations and greater adaptability in a dynamic market environment.
Enhancing Supply Chain Decision-Making
The strategic implementation of supply chain visibility software, combined with real-time data insights, underscores a comprehensive approach to maintaining and enhancing the operational efficiency and reliability of supply chains. This holistic strategy not only addresses current challenges but also prepares businesses for future demands, ensuring resilience and sustained growth in the face of global disruptions. By providing BCOs and LSPs with the tools needed to counteract impacts on their respective supply chains, this technology plays a vital role in maintaining the stability and competitiveness of British manufacturing in a volatile global market.