Final data published by S&P Global/CIPS showed that business activity in the UK manufacturing sector continued to rise in August, confirming the preliminary estimate and forecasts of economists, with output, new orders and employment all rising.
UK manufacturing PMI rose to 52.5 points, as expected, from 52.1 points in July. A value above 50 points indicates an expansion of activity in the sector. The PMI has now signaled expansion in five out of the past six months (the exception being April). Meanwhile, the latest reading was the highest since June 2023.
The report also showed that four out of the five PMI components were at levels signaling an improvement in overall operating conditions. Manufacturing production grew again in August, while the growth rate was close to July's near two-and-a-half-year high. Companies raised output in response to rising new order intakes and efforts to clear previously agreed contracts. New orders continued to rise in August (for the 4th month in a row). Meanwhile, new export orders declined again, which was caused by weaker demand from Europe, a slowdown in mainland China, freight delays, global conflicts and political uncertainty. Employment in the manufacturing sector rose again in August, recording the sharpest increase since July 2022. Outstanding business fell for the twenty-eighth month in a row, albeit to the weakest extent during that sequence. The data also showed that the outlook for the manufacturing sector remained positive. 61% of companies forecast that production would be higher one year from now, compared to only 6% anticipating a decline.