Final data published by S&P Global/CIPS showed that business activity in the UK manufacturing sector rose sharply in May, with levels of production and new business both rising at the fastest rates since early-2022. The outlook also brightened as manufacturers' positive sentiment rose to its highest level since February 2022.
UK manufacturing PMI rose to 51.2 points from 49.1 points in April. A value above 50 points indicates an expansion of activity in the sector. Economists had expected an increase to 51.3 points.
The report also showed that manufacturing production expanded at the quickest rate since April 2022, with the upturn broad-based by both sector and company size. New orders rose again in May, recording the sharpest increase since April 2022. The upturn in demand was centered on the domestic market, as new export orders fell for the twenty-eighth month in a row. However, the rate of contract was the joint-weakest in the current sequence of decline (matching March 2022). Meanwhile, employment declined for the 20th month in a row, while inventories of finished goods and purchases were both depleted. As for the inflationary situation, at the factory gate, output charge inflation strengthened for the fifth successive month and to its highest level in a year. That said, a solid easing in the rate of increase in input costs should help prevent price pressures from becoming embedded.