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Manufacturing sector enjoys ‘its strongest spell of growth for over two years’

by LLB staff reporter
1st Jul 24 11:43 am

The UK’s manufacturing sector has grown for the second consecutive month and June’s output had “robust sales.”

The growth came despite the cost of inflation rebounding along with “weak” exports.

The S&P Global/CIPS UK manufacturing PMI survey shows a reading of 50.9 in June and any reading above 50 means there is growth in the sector.

The S&P Global/CIPS UK manufacturing PMI survey found that production volumes rose and businesses saw a “rising intakes of new orders and ongoing efforts to clear backlogs of work.”

Rob Dobson, director at S&P Global Market Intelligence, said, “The UK manufacturing sector is enjoying its strongest spell of growth for over two years, with June seeing output and new order growth sustained at robust rates similar to May’s recent highs.

“The performance of the domestic market remains a real positive, providing a ripe source of new contract wins.

“In contrast, the ongoing weak export performance is concerning, with manufacturers reporting difficulties in securing new business in several key markets including the US, China and mainland Europe.”

Richard Powell, partner at MHA, said, “Manufacturing PMI has remained flat but this was to be anticipated as we’re in the run-up to an election. In addition, interest rates remain stubbornly high, and manufacturers are sitting on their hands until they are sure that the cuts will happen. However, even once rates start to fall, there will be a lag before investment starts to flow.

“While these are immediate challenges, there are some fundamental issues that the incoming government, of whichever colour, will have to address to support the sector. Labour shortages are still commonplace and are not going to be fixed overnight. Manufacturers are also struggling with exporting to the EU, the UK’s biggest trading partner, eight years post-Brexit.

“These issues can only be resolved through significant investment in the industry. Over the last few decades, there has been a lack of a well-defined plan to support manufacturers, which has led to closures. Although it sounds as though the manufacturing industry is finally being listened to as the recent party manifestos make reference to the importance of having an industrial strategy.

“Manufacturers have been calling out for this for many years; hopefully the next government will deliver.”

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