UK MANUFACTURING THRIVES, BUT NOT EXPORTS The latest UK Manufacturing PMI (Purchasing Managers’ Index) paints a relatively rosy picture of the state of the country’s manufacturing sector. The PMI hit a 26-month high of 52.5 in August, up from 52.1 in July, with output, new orders and employment all rising. There were further signs of price pressures easing, as inflation in input costs and selling prices both slowed. The UK manufactring PMI has been above 50.0, indicating an expansion of the sector, in five of the past six months – the exception being April. The only European country with a higher manufacturing PMI than the UK in August was Greece. Italy hit a five-month high of 49.4, but France recorded a seven-month low of 43.9, and Germany returned a five-month low of 42.4. And in the US, production fell for the first time in seven months, with the manufacturing PMI slipping from 49.6 in July to 47.9 in August. UK production increased for the fourth successive month in August, as companies raised their outputs to satisfy growing numbers of new orders, and to clear previous contracts. The rate of expansion was close to July's near 2½- year high. The recent rebounds in output and new orders have led to the fastest rate of job creation in the UK manufacturing sector for more than two years, especially among larger producers, although some smaller firms have also taken on staff. The fly in the ointment is that most of the new orders are coming from UK customers, with export orders falling for the 31st month in a row. Rob Dobson, director of S&P’s Global Market Intelligence operation which compiles the PMI figures, warns that the falling export numbers are “a key cause for concern, with new business from overseas having fallen continuously since early in 2022”. He points out that UK manufacturers are “experiencing difficulties in securing new contract wins overseas due to weaker demand from Europe, a slowdown in mainland China, freight delays, competitiveness issues, high shipping costs, global conflicts and political uncertainty. “Many of these issues are also impeding imports which, while benefiting domestic suppliers, is causing supply chain-related production constraints as witnessed by a further lengthening of supplier delivery times,” Dobson adds. Despite the poor export figures, UK manufacturers are bullish about the future, with 61% predicting that their production will be higher in a year’s time than it is now, with just 6% expecting a decline. UK manufacturing may not be out of the woods yet, and significant issues still remain – not the least being the shortage of suitably skilled workers, and the growing number of experienced personnel reaching retirement age – but the sector can be relatively satisfied with its recent performance, especially compared to some of its rivals. Tony Sacks, Editor n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ÐÕÍÖÓÖÎÐÊ ËÌÚÐÎÕ ÐÕÊÌ ¯´²³ ,QIRORJLF 'HVLJQ /WG _HQTXLULHV#LQIRORJLF GHVLJQ LVDWLRQ ZZZ LQIRORJLF GHVLJQ
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