UK manufacturing growth slows and underperforms in July
Growth in the UK manufacturing sector continued in July, with output and new orders accelerating despite the headline purchasing managers' index easing to a four-month low, S&P Global survey data showed on Monday.
The S&P Global UK manufacturing PMI slipped to 51.9 points in July from 52.5 in June. While the reading marked a four-month low, it remained above the 50.0-point threshold separating expansion from contraction for a ninth consecutive month.
Falling towards the neutral 50-point mark, it indicates the pace of manufacturing growth in the UK decelerated in July.
The reading came below the flash reading of 52.8 points for July.
Manufacturing output rose for a fourth straight month, with the pace of growth reaching its strongest level in nearly two years, supported by faster increases in both domestic and export orders. New export business expanded for a seventh consecutive month, with firms reporting stronger demand from North America, the EU, mainland China, India and South Korea.
Input cost inflation eased to a five-month low as supply chain pressures moderated, while output price inflation slowed to a four-month low. Supplier delivery times continued to lengthen, though at the weakest pace since February as resource availability improved.
Employment increased for a fourth successive month, but hiring growth slowed to near-stagnation as firms remained cautious about the outlook. Business optimism also slipped to a three-month low despite improving demand, with manufacturers citing concerns over global trade tensions, tax rises and regulatory changes.
S&P Global Market Intelligence Economics Director Rob Dobson said: "July brought further encouragement for the UK manufacturing sector, as rates of growth in output, new orders and new export business all accelerated...There was also positive news on the price and supply fronts...Hopefully progress relating to geopolitics, global trade tensions and the direction of the new UK government's industrial and tax policies will aid, and not hinder, this process."
The PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers on a panel of around 650 manufacturers in the UK.
Responses were collected between July 9 and 28. The services and composite PMI readings are due for release on Wednesday.
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