Markit/CIPS UK Manufacturing PMI released for June

Latest PMI remains over the 50.0 mark

The latest Markit/CIPS UK Manufacturing figures were released this morning with the seasonally adjusted number falling to 51.4 in June, from May’s revised figure of 51.9.

While the second quarter of the year was somewhat disappointing as a whole, and growth has slowed in June, the PMI is still above the neutral 50.0 mark, extending the run to a 27^th month in succession.

In addition, although companies reported a fall in new export orders – mainly because the exchange rate meant subdued demand from Europe – the domestic market held up in June, which subsequently resulted in higher inflows of new business.

There was a slowdown in UK manufacturing, with investment goods sector suffering, but intermediate goods producers reported that the level of manufacturing remained stagnant.

Consumer goods output has also continued to expand solidly and there was good news in manufacturing employment which has gone up for the 26^th consecutive month in June.

Companies ranging from SMEs to larger organisations benefited from the increase in staffing levels, with the intermediate, consumer and investment goods sectors all faring well.

Input cost averages went up in June for the first time in ten months, while selling prices reduced – continuing a trend that has been seen for five of the last six months. Generally, SMEs benefited from lower output charges.

David Noble, Group Chief Executive Officer for the Chartered Institute of Procurement & Supply, commented on the indifferent figures, which “failed to dampen optimism.”

He said: “Manufacturing delivered a sluggish but steady set of results this month compared to more upbeat activity at the start of year, but still remained on terra firma.

“Supported by domestic demand, purchasing managers reported gentler inflows of new orders and continuing business, as interest from export markets had lost much of its energy.

“Procurement activity also fell at the fastest rate since April 2013 as new orders saw a modest slowdown giving the opportunity to catch-up on backlogs as employment continued to rise.

“As increasing oil prices impacted on marginally higher output charges, they failed to dampen optimism in the sector as the headline PMI index remained above its no-change mark.”

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