13 MARCH 2025
The OECD survey of confidence in the UK manufacturing sector (red line) paints a pretty bleak picture for Britain’s industrial sectors.
Sentiment has taken a sharp leg lower since last year’s Autumn budget, extending a downtrend that began in late 2021. Business leaders cite escalating operating costs and a rising tax burden as the main drivers of this multi-year downtrend.
Encouragingly, consumer confidence (blue line) has recovered strongly from its 2022 low despite persistent cost-of-living pressures. A resilient labour market and elevated wage growth have evidently buoyed household activity; average weekly earnings were up 6%y/y in December.
There is a good chance that these trends reverse as the year unfolds.
The health of UK manufacturing is intricately linked to the global cycle, so the expected pick up in US and Chinese growth should spark a rebound in UK industrial activity.
Conversely, consumer confidence may struggle in the face of rising cost pressures and heightened political uncertainty.
The content of this communication is for information purposes only. Bentley Reid believes that, at the time of publication, the views expressed and opinions given are correct but cannot guarantee replication of depicted performance. Viewers intending to take action based upon the content of this communication should first consult with the professional who advises them on their financial affairs. Capital invested will be at risk, and you may get back less than you invest. The past is not a reliable indicator of future performance. Neither the publisher nor any of its subsidiaries or connected parties accepts responsibility for any direct or indirect loss suffered by a recipient as a result of any action or inaction, in reliance upon the content of this communication.
Key trends in portfolio management
Is India Leaving the “Fragile EM” Era Behind?
Discussion on the unrest in the Middle East
