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The seasonally-adjusted manufacturing PMI fell to a 14-month low of 46.9 in February, down from 48.3 in January, but above the earlier flash estimate of 46.4.
The PMI has remained at a sub-50 level, signalling contraction, for five months in a row.
Output contracted for the fourth month running in February, as manufacturers scaled back production in response to lower new order intakes, subdued client confidence (at both businesses and consumers) and supply chain issues.
Companies faced weaker demand from both domestic and overseas clients.
The home market was mainly downbeat due to a combination of rising cost pressures, an associated lack of willingness to spend among customers and the impact of policy changes announced in last year's Autumn Budget, S&P Global Ratings said in a release.
Meanwhile, new export business fell at the quickest pace in a year amid reports of reduced new order intakes from Brazil, Europe (with specific references to Germany), the Middle East and the United States. Overseas market conditions were reported to be generally quiet overall.
The weakness signalled by the latest figures was widespread, with all three of the sub-industries covered by the survey (consumer, intermediate and investment goods) seeing production, new business and foreign demand decline.
Consumer goods was the worst performing sector overall, registering the steepest drops in all three of those variables.
The deepening downturn at manufacturers filtered through to the labour market in February, with the latest data signalling the steepest cut to employment in the sector since May 2020.
Staffing levels have now fallen in five out of the past six months. The latest round of job losses reflected weak demand, cost control initiatives and restructuring in response to changes in both the minimum wage and employer national insurance contributions (NICs).
Companies responded by laying off temporary staff, reducing the hours of some employees, redundancies and the non-replacement of leavers and retirees.
Losses were seen across small (fastest rate of decline for 56 months), medium (ten-month high) and large sized enterprises (57-month high). The large size category implemented by far the steepest reduction of the three.
Cost and demand considerations were also the principal factors underlying the latest cutbacks to purchasing activity and stock holdings.
Input buying volumes were reduced at the joint-quickest pace for a year (matching December 2024), while inventories of both purchases and finished goods were depleted.
February 2025 also witnessed supply chains remain under duress despite weaker demand for inputs. Shipping delays (including the Red Sea crisis), vendor capacity issues, port disruption, customs delays and an increasing number of items being on back order were all cited as reasons underlying longer lead times from suppliers.
Vendor performance has deteriorated in each of the past 14 months. Underlying price pressures continued to climb in February, with rates of inflation in input costs and output charges both accelerating.
Selling prices rose to the greatest extent since April 2023, reflecting the pass through of current and expected cost increases to clients, higher staff costs and increased tax burdens.
Business optimism rose to a six-month high in February. Improved sentiment was attributed to investment spending, marketing initiatives, new products and projects, planned diversifications and hopes economic conditions would strengthen.
Fibre2Fashion News Desk (DS)