UK manufacturing sector grows in September despite supply chain strife

The UK manufacturing sector saw a growth upturn last month, a survey showed Thursday, but supply chains remained "under noticeable stress".

The S&P Global purchasing managers' index edged up to 51.9 points in September, from 51.7 in August. Moving further above the 50 point mark which separates growth from decline, the reading suggests progress accelerated last month. The PMI has been in expansion territory for the past 11 months.

Nonetheless, it was a hair below the 52.0 flash reading.

"September saw the UK manufacturing upturn continue, as levels of output, new orders and employment all rose. The outlook for industry also remained generally positive, with almost half of manufacturers expecting production to increase over the coming 12 months," S&P Global said.

"Four of the five PMI components were at levels consistent with an improvement in overall operating conditions. Alongside the expansions in output, new orders and employment, there was also a further increase in average vendor lead times. In contrast, stocks of purchases contracted."

But the performance at suppliers weakened at the greatest extent since June, S&P Global, amid shipping delays, geopolitical worries and port congestion.

"Supply chains remained under noticeable stress during September, as highlighted by a further marked increase in average vendor delivery times," S&P Global said.

"Stretched supply chains also exerted upward pressure on purchasing costs during September. The rate of input price inflation accelerated for the first time in four months, amid reports of higher costs for chemicals, electronics, energy and food stuffs. Geopolitical conflicts and rising transportation costs were also mentioned by several firms, with the latter often linked to increased diesel prices."

Manufacturers had a positive outlook, with roughly half of the survey panel predicting an output hike in the year ahead.

"That said, the degree of confidence was slightly below August's six-month high," S&P Global added.

The manufacturing PMI features a panel of around 600 firms, with responses collected in the second half of the month. The services PMI is released on Monday.

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