- Prior 51.2
It’s a slight revision lower to the initial reading but still reaffirms a marginal growth in UK’s manufacturing sector. Both output and new orders continued to expand for a second successive month. However, price pressures remain stubborn with input cost inflation rising to a 17-month high. That’s a troubling sign for the BOE. S&P Global notes that:
“The UK manufacturing sector is enjoying its strongest
spell of growth for over two years, with June seeing
output and new order growth sustained at robust rates
similar to May’s recent highs. The performance of the
domestic market remains a real positive, providing
a ripe source of new contract wins. In contrast, the
ongoing weak export performance is concerning, with
manufacturers reporting difficulties in securing new
business in several key markets including the US, China
and mainland Europe.
“Although June also saw manufacturers maintain a
relatively high degree of optimism towards the future,
this was not sufficient to lessen their focus on cost
minimisation and cash flow protection. This led to
further job losses, cuts to non-essential spending
and efforts to operate on leaner stock holdings. This
is coming from a backdrop of renewed cost inflation
pressure, with manufacturers’ input prices now rising at
the quickest pace since the start of 2023. This renewed
upward lurch in manufacturing prices will likely add to
concerns over the potential stubbornness of underlying
inflationary pressures among hawkish rate setters at the
Bank of England.”