UK manufacturing slowdown continues as business
optimism dips to lowest level in over two years

Key findings

Output growth slows to near-stagnation pace…
…as new order intakes fall for the first time
since January 2021
Price inflation remains elevated despite
further easing

The slowdown in the UK manufacturing sector continued at
the end of the second quarter, as June saw output growth
grind to a near-standstill pace and new orders contract for
the first time in 17 months. Business optimism dipped to its
lowest since May 2020, as the number of firms expecting
production to rise over the coming year fell to 47% (from 55%
in May).
The seasonally adjusted S&P Global / CIPS UK Manufacturing
Purchasing Managers’ Index® (PMI®) fell to a two-year low
of 52.8 in June, down from 54.6 in May. The PMI has remained
above the 50.0 mark since June 2020.
Manufacturing production rose for the twenty-fifth
consecutive month in June. However, the rate of expansion
was the weakest during the current upturn. Performances
differed widely across the sector. Consumer goods producers
saw a marked downturn in output, while robust expansion
was again registered in the investment goods industry.
June saw intakes of new work decline for the first time
since January 2021. Companies indicated that the weaker
economic outlook, reduced new export order intakes, slower
growth of domestic demand, the war in Ukraine, raw material
shortages and the slowdown in China all contributed to the
reduction in new work received.
The consumer goods and intermediate goods sectors were
hardest hit by the decline in new order inflows. In contrast,
investment goods producers saw new work rise for the fifth
month running.
New export orders contracted for the fifth month running
in June, mainly reflecting the slowdown in China, rising
economic uncertainty, the war in Ukraine and increased
competition. Some firms also noted that ongoing Brexitrelated difficulties and weaker growth had impacted new
order intakes from the EU. New export business declined in
the consumer and intermediate goods industries, and was
unchanged in the investment goods category

source : spglobal.com