UK manufacturing growth cools in August but hiring accelerates

The UK manufacturing sector continued to expand in August, although growth in output and new orders slowed, survey data showed on Tuesday.

The seasonally adjusted S&P Global UK manufacturing purchasing managers' index fell to a five-month low of 51.7 points in August from 51.9 in July, but came in above the earlier flash estimate of 51.5 published in late August.

The index has remained above the 50-point mark separating expansion from contraction for ten consecutive months.

Manufacturing output rose for a fifth successive month, though at the weakest pace since April, as new orders increased. New export business grew for an eighth consecutive month, supported by demand from mainland China, the US, the Middle East and western Europe.

Employment increased at the fastest pace in two years, while business confidence rose to a six-month high.

Meanwhile, purchase price inflation eased for a third consecutive month to a six-month low, despite continued pressure from energy costs, supply constraints and transport disruption.

"The rate of expansion in the UK manufacturing sector cooled in August, with output and new order growth losing traction," said Rob Dobson, director at S&P Global Market Intelligence.

"There are still signs for continued optimism, however, as manufacturers reported a positive outlook for the year ahead."

The manufacturing PMI is compiled from responses from purchasing managers at around 650 British manufacturers, collected between August 12 and 25. The UK's services and composite PMI readings are due on Thursday.

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