Home | BUILDING BRITAIN | Output in the UK manufacturing sector eased in August to a 25-month low
Output in the UK manufacturing sector eased in August to a 25-month low
Output in the UK manufacturing sector eased in August to a 25-month low

Output in the UK manufacturing sector eased in August to a 25-month low

Output in the UK manufacturing sector grew in August, but at a lower rate.

The latest information is from IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI), which reveals the monthly analysis of the production industry.

And the ease of growth in the UK manufacturing sector has continued after the slight fall in July.

The PMI for August has fallen further still; it is now 52.8, after falling from the revised 54.0 in July.

Although the data reveals that the UK manufacturing sector that output is still growing – the PMI is above the no-change rate of 50.0 – the figure in August is at its lowest level for just over two years.

This is likely to cause consternation in the industry given the pattern highlighted in the production in the automotive industry, where there have been falls in car manufacturing.

And the overall pattern from Markit’s data suggests that output hasn’t been this sluggish in the sector for 25 months.

Rising at its slowest pace for 17 months, manufacturing output’s struggles in August can be attributed to the easing in growth of new orders not seen during the 25-month sequence of expansion.

There have been reports of softer growth of new work in the domestic market. However, the main drag, according to Markit, came from the trend in export orders.

Understandably, this slowdown of manufacturing has affected the labour market and business confidence during the month.

Because of the ease in growth, job creation has itself eased to near-stagnation; in terms of optimism, 47% of respondents expect higher production in a year’s time, but overall confidence has dipped to a low that has not been seen for 22 months.

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, believes the sector faces an uncertain future.

“With a subdued global economy threatened by escalating trade wars and Brexit uncertainty making its mark, it’s unclear where future opportunities to sustain the health of the sector will come from.”

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