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IHS Markit PMI for the manufacturing sector hit 54.0 in July
IHS Markit PMI for the manufacturing sector hit 54.0 in July

IHS Markit PMI for the manufacturing sector hit 54.0 in July

Output in the manufacturing sector grew again in July, albeit at a slower pace, according to the latest figures.

The monthly IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) has revealed a softer growth patch at the start of the third quarter of the year, with July suffering from weaker growth in both output and new orders.

The PMI for the manufacturing sector in July was 54.0, which is a three-month low and slightly down from the 54.3 level recorded in June.

This is much lower level of growth than was recorded at the start of the year and even further back in November. However, the PMI is still much higher than the 50.0 no change level in output.

Significantly, output in the manufacturing sector is comfortably higher than the long run PMI average in the industry of 51.8.

According to the Markit report, the stunted growth in production was attributed to an easing in pace of increase in new orders, with the domestic market the main reason; for exports, work increased at a rate not seen for six months.

Good news came in the production of investment goods producers, while consumer goods industry also fared well.

On the flip side, intermediate goods production fell for the first time in two years.

Rob Dobson, Director at IHS Markit, described the performance of the manufacturing sector as “uneven.”

He said: “The July survey data also shows that the performance of the sector is becoming more uneven, with solid output growth in the investment goods industry being largely offset by intermediate goods production contracting for the first time in two years.

“As the intermediate goods sector supplies other manufacturers, taken alongside weaker growth of total new orders and a drop in business confidence to a 21-month low, this all suggests industry is unlikely to exit this soft patch in the near future.”

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