The recovery in the UK manufacturing sector continued into August, with output, new orders and employment all rising, a survey on Monday showed.
The seasonally adjusted S&P Global UK manufacturing purchasing managers’ index (PMI) rose to a 26-month high of 52.5 in August, up from 52.1 in July, and unchanged from the earlier flash estimate.
The PMI has now signalled expansion in five out of the past six months, above the 50-point neutral mark, with the exception being April.
Four of the PMI components stayed at levels consistent with an improvement in operating performance during August – output, new orders, employment and suppliers’ delivery times. In contrast, the stocks of purchases component signalled contraction for the 23rd consecutive month.
The domestic market remained the principal spur of new contract wins, as new export orders decreased for the thirty-first consecutive month, S&P remarked. Companies linked lower intakes of new work from overseas clients to weaker demand from Europe, a slowdown in mainland China, freight delays, competitiveness issues caused by high shipping costs, global conflicts and political uncertainty.
S&P Global Market Intelligence Director Rob Dobson said the “upturn continues to be driven by the domestic market, which is helping to compensate for lost export orders”.
But he cautioned the trend in export orders was a “key cause for concern”, with new business from overseas having fallen continuously since early in 2022.
Looking ahead, the outlook for the manufacturing sector remains positive with 61% of companies surveyed forecasting that production would be higher one year from now, compared to only 6% anticipating a decline.
This positive sentiment was linked to new client wins, product launches, efforts to open up new markets, promotional activity and hopes for economic recovery.
The S&P Global UK manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 650 manufacturers.
By Jeremy Cutler, Alliance News reporter
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