The UK manufacturing sector experienced a resurgence in May, marked by the most significant production growth in over two years, driven by an increase in order volumes, according to the final survey data released by S&P Global on Monday.
The Manufacturing Purchasing Managers' Index (PMI) rose to 51.2 in May from 49.1 in April, recording its highest value since July 2022, albeit slightly lower than the preliminary estimate of 51.3. This index has remained above the pivotal 50.0 mark, indicating growth, for two out of the past three months.
Manufacturing output saw its fastest increase since April 2022, buoyed by a rise in new work intakes, improved market conditions, and efforts to fulfill existing contracts.
The recovery was primarily focused on the domestic market, as new export orders declined for the twenty-eighth consecutive month.
Reflecting better current market conditions, business confidence improved in May, with manufacturer optimism reaching its highest level since February 2022.
However, the survey noted a continuous decline in employment for the twentieth straight month, alongside reductions in inventories of finished goods and raw material purchases.
Input purchasing saw a slight uptick in May, ending a 22-month trend of reduced buying activity. Suppliers’ delivery times extended for the fifth consecutive month, largely due to logistical issues such as the ongoing disruption in the Red Sea region.
Input costs continued to rise for the fifth consecutive month, but the rate of increase was lower than in April. The data presented a varied picture of purchasing cost trends. Output price inflation reached its highest level in a year, after increasing over the past five months.
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