UK manufacturing sector grows at fastest pace in more than two years

2nd Sep 2024 07:14

(Sharecast News) - UK manufacturing activity grew at its fastest pace in more than two years in August, according to a survey released on Monday.

The S&P Global manufacturing purchasing managers' index rose to a 26-month high of 52.5 from 52.1 in July, in line with the flash estimate.

A reading above 50.0 indicates expansion, while a reading below signals contraction.

The PMI has now signalled expansion for five out of the past six months.

Rob Dobson, director at S&P Global Market Intelligence, said the upturn was broad-based across manufacturing, with the investment goods sector the standout performer.

"The upturn continues to be driven by the domestic market, which is helping to compensate for lost export orders," he said.

"The trend in export orders a key cause for concern, with new business from overseas having fallen continuously since early in 2022. UK manufacturers are experiencing difficulties in securing new contract wins overseas due to weaker demand from Europe, a slowdown in mainland China, freight delays, competitiveness issues, high shipping costs, global conflicts and political uncertainty.

"Many of these issues are also impeding imports which, while benefiting domestic suppliers, is causing supply chain-related production constraints as witnessed by a further marked lengthening of supplier delivery times.

"These supply constraints and higher shipping costs continued to drive up input prices for manufacturers, which rose sharply again in August by recent standards."