Story Highlight
– UK manufacturing downturn slowed in July, index at 48.0.
– Output contracted mildly for the ninth consecutive month.
– Business optimism reached a five-month high in July.
– Incoming new business dropped for the tenth straight month.
– Employment reduced as job losses continued for ninth month.
Full Story
The UK manufacturing sector experienced a deceleration in its downturn during July, with survey results from S&P Global indicating an easing in output contraction and a rise in business optimism to its highest level in five months. The final reading of the factory Purchasing Managers’ Index (PMI) improved to 48.0, up from 47.7 in June, although it remains below the neutral mark of 50, indicating that contraction has persisted for ten consecutive months. The preliminary score earlier in the month was reported at 48.2.
Rob Dobson, Director at S&P Global Market Intelligence, remarked that while there are tentative signs of positivity emerging from the manufacturing landscape, a clear route back to robust growth remains elusive. The survey noted a continued decline in manufacturing output, with the latest figures reflecting only a mild reduction. New business orders have now decreased for ten months, driven by diminishing confidence among consumers and reduced spending in both national and international markets. Export orders have also seen a downturn, continuing a trend that has lasted three and a half years. This decline can be attributed to uncertainties surrounding global tariffs, ongoing bureaucratic challenges stemming from Brexit, and increased competition.
Employment levels in the sector also fell, marking the ninth month of job reductions. Conversely, business optimism saw a rise, with contributors attributing this shift to expectations of market recovery, upcoming product launches, and improvements in operational efficiency. Regarding pricing, the survey indicated that both input costs and selling price inflation remained relatively stable throughout July, suggesting a degree of predictability amid broader challenges.
