UK Manufacturing PMI Indicates Mild Output Growth
14 Jun 2018
Published in: Black Country Chamber of Commerce News
May saw a mild improvement in the performance of the UK manufacturing sector. The seasonally adjusted IHS Markit/CIPS PMI, rose to 54.4, up slightly from April's 17-month low of 53.9, signalling growth for the twenty-second straight month.
Growth of incoming new business remained solid in May, but the pace of expansion eased to an 11- month low. The slower trend reflected a softer increase in new work from the domestic market, as inflows of new business from overseas strengthened slightly.
Companies reported growth of new work from Europe, North America, China, India, South America and Africa. The pace of job creation in the manufacturing sector also lost momentum in May. Employment rose only marginally, with the pace of increase the lowest in 15 months.
Commenting on the latest UK manufacturing PMI statistics, Neil Lloyd, Sales Director at FBC Manby Bowdler, said: "A slight rise in PMI for May is welcome following the previous few months of decline. The underlying detail though is concerning, especially the slowdown in sales, leading to the largest amount of unsold stock since the survey began.
"Cost inflation, driven in part by higher oil prices and supply chain pressures are beginning to bite. That said, with over half those surveyed having a positive outlook for the next 12 months, export markets growing and investment continuing apace it's not all doom and gloom. This is reflected in the conversations I have with our clients who on the whole are enjoying the positivity surrounding UK manufacturing at present."
Also commenting on the latest PMI release, Corin Crane, Chief Executive of the Black Country Chamber, said: "As the PMI indicates, UK manufacturers are facing rising cost inflation and supply-chain pressures. Together with the potential threat to supply chains brought about by Brexit and well publicised issues around public procurement, there are several pressing issues facing manufacturers. However, a PMI of over 50 does signal a healthy manufacturing sector for the UK, albeit with some looming constraints. A healthy manufacturing sector is crucial for the Black Country, so it is imperative that these issues are understood and mitigated against by top level policy-makers."
If you would like to become involved with our manufacturing campaign, we have a number of upcoming events, including a factory tour of Industrial Power Units Ltd on Friday 29th June and a Transport and Infrastructure panel session at the Hawthorns football stadium on 22nd June. For more information on our respective campaigns and events listings please visit www.blackcountrychamber.co.uk/manufacturing.
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