It’s a slight downward revision from the flash reading but still reaffirms marginal growth in the UK manufacturing sector. Both output and new orders continued to expand for the second month running. However, price pressures remain stubborn with input cost inflation hitting a 17-month high. This is a worrying sign for the Bank of England. S&P Global notes:
“The UK manufacturing sector is experiencing its strongest growth spell in more than two years, with June seeing production and new orders growing at similar strong rates to the recent May highs. The domestic market performance remains really positive, providing a ripe source of new contract wins. In contrast However, continued weak export performance is worrying, with manufacturers reporting difficulties securing new business in several key markets including the US, China and continental Europe.
“Although June also saw manufacturers maintain a relatively high degree of optimism about the future, this was not enough to reduce their focus on reducing costs and protecting cash flows. This led to further job losses, reductions in non-essential spending and efforts to work on Lower inventory holdings This comes against the backdrop of renewed inflation pressures, with manufacturing input prices now rising at the fastest pace since the start of 2023. This renewed rise in manufacturing prices is likely to heighten concerns about the potential stubbornness of underlying inflationary pressures among hawkish interest rate setters. Bank of England.”
