British factories are suffering from an “unprecedented” rise in unsold stock as Donald Trump’s trade war hits their overseas sales. American manufacturers’ unsold inventory soared at the fastest pace in more than 18 years in October, according to the S&P Global Manufacturing purchasing managers’ index (PMI).
Businesses reported that their production exceeded overall demand after tariffs saw their export orders slump for the fourth month in a row. Sales declined to key markets such as Canada, China, Europe and Mexico, which have all been hit by steep new US tariffs. Although Mr Trump’s tariffs apply to imports from these countries, it seems they have also had a damaging impact on US sales abroad.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the surge in unsold stock was “worrying” and “unprecedented”. Mr Williamson said: “[It was] widely linked to weaker than anticipated sales to customers, especially in export markets, which could trigger a downshifting of production in the coming months unless demand revives.”
Business confidence among consumer goods producers fell to a two-year low as manufacturers became concerned about future demand. Mr Williamson added: “Firms [are] growing increasingly worried about household spending in the US and falling sales to consumers in export markets.”