UK manufacturing growth slows in June

1st Jul 2024 10:17

(Sharecast News) - Growth in the UK manufacturing sector slowed slightly in June, according to a survey released on Monday.

The S&P Global manufacturing purchasing managers' index nudged down to 50.9 from a 22-month high of 51.2 in May. It came in above the 50.0 mark that separates contraction from expansion but below the flash estimate of 51.4.

The survey showed that optimism remained close to May's 27-month high, with 57% of firms expecting output to rise over the coming year.

Rob Dobson, director at S&P Global Market Intelligence, said: "The UK manufacturing sector is enjoying its strongest spell of growth for over two years, with June seeing output and new order growth sustained at robust rates similar to May's recent highs. The performance of the domestic market remains a real positive, providing a ripe source of new contract wins. In contrast, the ongoing weak export performance is concerning, with manufacturers reporting difficulties in securing new business in several key markets including the US, China and mainland Europe.

"Although June also saw manufacturers maintain a relatively high degree of optimism towards the future, this was not sufficient to lessen their focus on cost minimisation and cash flow protection. This led to further job losses, cuts to non-essential spending and efforts to operate on leaner stock holdings. This is coming from a backdrop of renewed cost inflation pressure, with manufacturers' input prices now rising at the quickest pace since the start of 2023. This renewed upward lurch in manufacturing prices will likely add to concerns over the potential stubbornness of underlying inflationary pressures among hawkish rate setters at the Bank of England."