June 2021

NEWS n CONDITIONS IN THE UK manufacturing sector improved at an unprecedented pace in May, as output growth strengthened and new orders rose at the fastest pace in the near 30-year history of the IHS Markit/CIPS PMI (Purchasing Managers’ Index). Production, staffing levels, business sentiment and export orders all hit record or near-record rates. But backlogs in work also rose at the fastest rate in the PMI’s history, while shortages of raw materials and supply-chain disruption led to the sharpest rise in purchasing costs since the survey began in January 1992. This led manufacturers to raise prices, with inflation hitting a survey record. The seasonally adjusted PMI rose from 60.9 in April to 65.6 in May, exceeding the previous record of 61.0, set in 1994. The PMI has risen in each of the past 12 months. Manufacturing production expanded at one of the quickest rates in the PMI’s history, bettered only by those in August 2013 and July 1994. Underpinning the latest rises were record gains in new business, as domestic and overseas demand continued to revive. New export orders climbed at a survey-record pace in May, with stronger demand from the EU, the US and China. But the beneficiaries were mainly larger companies, with the rate of increase at small firms being “comparatively mild”. The backlog in work was a major factor in a recruitment surge among manufacturers, resulting in a record increase in staffing levels. Manufacturers’ efforts to minimise the impact of supply-chain disruption led to a record increase in purchasing activity during May. Rising production needs, building-up safety stocks and guarding against further price rises also contributed to an increase in input buying volumes. May saw business sentiment hit its highest level since data was first collected in July 2012. More than 70% of companies predicted that production would be higher in one year's time, with only 3% expecting a decline. Duncan Brock, group director at the Chartered Institute of Procurement & Supply, describes May as “a month of survey records, as the manufacturing sector not only held its ground, but increased its share of productivity for the UK economy with higher levels of orders, job creation and optimism. “The march of the makers has turned into a sprint as the blocks of lockdowns have been removed, but we haven’t seen this level of price inflation on materials for decades,” he adds. “Supply chain managers anticipate a continuing squeeze on deliveries and are forward buying and building stocks, so we may not have seen price peak yet.” https://ihsmarkit.com/products/pmi.html Output, orders, staffing and prices all hit records in May The May manufacturing PMI value of 65.6 exceeded the previous record of 61.0 set in July 1994. Any value over 50 is an improvement on the previous month. Source: IHS Markit / CIPS FOR MORE NEWS VISIT WWW.DRIVESNCONTROLS.COM Monitoring Rack Cooling Power Security IT INFRASTRUCTURE SOFTWARE & SERVICES www.rittal.co.uk