Source: Sharecast
According to a closely watched survey from S&P Global on Wednesday, the composite purchasing managers' index (PMI) dropped to 48.2 this month, down from 51.5 in March.
This was the first print under the neutral 50-point mark since October 2023, the lowest since November 2022, and well below the 50.4 reading expected by economists.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said UK businesses were "reporting more of a struggle to keep their heads above water in April".
The service-sector PMI dropped to a 27-month low of 48.9 from 52.5, while the manufacturing PMI declined to a 20-month low of 44.0 from 45.3.
S&P Global said that weaker demand from international markets was largely to blame for fall in activity across both services and manufacturing, with new export orders dropping at their sharpest rate since May 2020.
Confidence among private sector businesses also waned, with the degree of optimism for the year ahead falling to its lowest level since October 2022, with survey respondents citing the impact of the US government's tariffs on international trade.
“April’s fall in output was the largest recorded for nearly two and a half years, consistent with GDP declining at a quarterly rate of 0.3%, reflecting falling activity and demand across both manufacturing and services," Williamson said.
“Job cutting remains aggressive as business optimism about the year ahead sank to a two-and-a-half-year low, and one of the lowest levels yet recorded by the survey, even surpassing the low seen in the immediate aftermath of the Brexit vote in 2016."