UK manufacturers have increased production to levels not observed in nearly two years, despite a generally gloomy economic outlook. This marks the ninth consecutive month of growth for the sector, according to S&P Global’s monthly survey of output across manufacturers.
The purchasing managers’ index (PMI), which indicates growth trends, registered 51.9. This figure is above the 50-point threshold that signifies neutrality in output. Manufacturers reported that both output and new orders grew at faster rates compared to June, although small-scale manufacturers experienced a “mild downturn” in production volumes.
Rob Dobson, a director at S&P Global, noted that July brought “further encouragement” for businesses, with production levels reaching a near-two-year high. He also highlighted positive developments regarding prices and supply, as the rate of increase in input costs sharply slowed to a five-month low, and supply chain delays eased to their lowest point since the outbreak of the war in the Middle East.
However, improved demand for UK-made goods did not significantly boost the labour market, with the increase in employment being the weakest in four months. Data from the survey, which included around 650 manufacturers, indicated that companies are focusing on cost reduction amidst concerns about potential spikes in energy costs.