Manufacturing sector enjoys ‘strongest period of growth in more than two years’ – London Business News

The UK manufacturing sector grew for the second month in a row, with June production showing “robust sales”.

The increase occurred despite rising inflation and “weak” exports.

The S&P Global/CIPS UK manufacturing survey showed a PMI of 50.9 in June, with any reading above 50 indicating growth in the sector.

The S&P Global/CIPS UK Manufacturing PMI survey showed that production volumes rose and companies reported “an increase in new orders and continued efforts to clear the backlog of orders”.

Rob Dobson, director of S&P Global Market Intelligence, said: “The UK manufacturing sector is enjoying its strongest period of growth in more than two years, with growth in output and new orders remaining solid in June, similar to the recent peaks in May.

“The performance of the domestic market remains really positive and represents a solid source of new contracts.

“On the other hand, continued weak export performance is concerning, with manufacturers reporting difficulties in attracting new customers in several key markets, including the US, China and continental Europe.”

Richard Powell, partner at MHA, said: “Manufacturing PMI remained flat, but that was to be expected as the election approaches. Moreover, interest rates remain stubbornly high and producers are sitting on their hands until they are sure that cuts will be made. However, even when rates start to fall, there will be a delay before investment starts flowing.

“While these are immediate challenges, there are fundamental issues that the new government, regardless of colour, will need to address to support the sector. Labour shortages are still widespread and will not be fixed overnight. Manufacturers are also struggling to export to the EU, the UK’s largest trading partner, eight years after Brexit.

“These problems can only be solved by significant investment in the industry. Over the past few decades, there has been a lack of a well-defined plan to support producers, which has led to closures. Although it sounds like the manufacturing industry is finally being heard, with recent party manifestos alluding to the importance of having an industrial strategy.

“Producers have been calling for this for many years; Let’s hope the next government will deliver results.”