UK manufacturing PMI hits 26-month high in August

The UK manufacturing sector showed continued recovery in August, with the S&P Global UK Manufacturing PMI rising to a 26-month high of 52.5, up from 52.1 in July.

The PMI has now signalled expansion in five out of the past six months, with exception in April. Key components of the PMI, including output, new orders, and employment, all saw gains.

Manufacturing production increased for the fourth consecutive month, driven by rising new orders and efforts to clear existing contracts.

“The UK manufacturing sector remained a positive contributor to broader economic growth in August. The headline PMI hit a 26-month high of 52.5, reflecting solid expansions in output and new orders and the strongest jobs growth for over two years. The upturn is broad-based across manufacturing, with the investment goods sector the stand-out performer.” said Rob Dobson, Director at S&P Global Market Intelligence.

Job creation accelerated, reaching its fastest pace in over two years. The investment goods sector led the growth, with substantial increases in output, new orders, and employment.

Despite these gains, new export orders fell for the thirty-first consecutive month due to weaker demand from Europe, China, and other factors. Input costs continued to rise, driven by higher prices for energy, metals, and shipping. However, rates of inflation for both input costs and selling prices eased.

The outlook for the sector remains positive, with 61 per cent of firms expecting higher production in the coming year, despite ongoing challenges with export orders and supply chain issues.