Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The manufacturing sector in the UK saw growth slow in May, data from S&P Global showed on Wednesday, with a hit to demand leading to a seven-month low for output.
The seasonally adjusted S&P Global-CIPS UK manufacturing purchasing managers' index posted 54.6 points in May, unchanged from the earlier flash estimate and down from 55.8 in April.
The reading was in line with market forecasts, according to FXStreet.
S&P noted the sector was hit by falling output, new orders and employment.
‘The slowdown was driven by weaker growth of domestic demand, lower intakes of new export work and ongoing disruption caused by stretched supply chains, rising cost pressures and the war in Ukraine,’ S&P explained.
Rob Dobson, director at S&P Global Market Intelligence, said manufacturing firms faced a ‘barrage of headwinds’ during the month.
‘Factories are reporting a slowdown in domestic demand, falling exports, shortages of inputs and staff, rising cost pressures and heightened concern about the outlook given geopolitical uncertainties,’ Dobson continued.
‘The consumer goods sector was especially hard hit, as household demand slumped in response to the ongoing cost of living crisis. With both input costs and selling prices rising at rates close to April's peaks, the surveys suggest that there is no sign of the inflationary surge abating any time soon. Manufacturers continue to report issues getting the right materials, at the right time for the right price, and energy prices remain a major concern.’
Looking ahead, Dobson feels further slowdowns are in the offing.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, added: ‘Though the strain on vendor performance eased there is little in this months figures to encourage the manufacturing sector and optimism fell to a 17-month low. Suffering a potent cocktail of more disruptions, rising cost pressures and a go-slow UK economy, businesses will be on a knife edge that any business decisions will be the right ones for the coming months.’
The PMI is collected from responses to questionnaires sent to purchasing managers in a panel of around 650 manufacturers in the UK. Responses were collected from May 14 to 26.
Copyright 2022 Alliance News Limited. All Rights Reserved.