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UK’s manufacturing grows for the second month running

by LLB staff reporter
3rd Aug 20 11:54 am

According to HIS Markit/CIPS, the manufacturing purchasing manager’s index (PMI), the UK’s manufacturing sector grew for the second month running in July.

The PMI hit a score of 53.3 in July compared with 50.1 in June, anything above 50 is an improvement for the sectors outlook.

The manufacturing sector scored a 16-month high, but was a little below the preliminary number of 53.6 which was released in July.

The expansion has happened as furloughed staff have returned back to work due to easing of the lockdown, whilst production has increased in the consumer and intermediate goods industries.

Rob Dobson, director at IHS Markit said, manufacturing is on a “much firmer footing” as they enter the third quarter, but warned it will take a long time to get back to pre-Covid levels.

Dobson said, “Despite the solid start to the recovery, the road left to travel remains long and precarious.

“An extended period of growth is still needed to fully recoup the ground lost in recent months. This is also the case for the labour market, where job losses are continuing despite businesses reopening.

“There is a significant risk of further redundancies and of furloughed workers not returning unless demand and confidence stage more substantial and long-lasting rebounds in the months ahead.”

Steve Harris, head of manufacturing and industrials at Lloyds Bank said, “It’s encouraging to see growth again after June’s reading barely nudged into positive territory, but the caveat remains that this is a rise from an extremely low base.

“New orders rising shows some momentum is beginning to build behind a wider recovery, and it will be important to sustain this to underpin further growth.

“However, some stockpiling will be a contributing factor here as firms prepare for the big unknown of possible second waves of coronavirus and also the end of the Brexit transition period in December.”

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