The UK manufacturing sector remained in expansion in August, although growth in output and new orders lost some momentum compared with previous months.
According to the latest
S&P Global UK Manufacturing PMI, the headline index slipped to 51.7 from 51.9 in July, marking a five-month low but remaining above the 50.0 no-change threshold for the tenth consecutive month.
Despite the slight slowdown, the survey pointed to a generally positive outlook for the sector, with business confidence climbing to a six-month high and manufacturers adding staff at the fastest rate seen in two years.
Manufacturing output increased for the fifth consecutive month in August, supported by stronger demand from both domestic and overseas markets. However, the pace of growth eased to its weakest since April, reflecting more cautious market conditions.
New orders also rose during the month, although the rate of expansion moderated. The survey highlighted significant differences across the sector. Medium-sized and large manufacturers continued to report growth in both production and order intake, while smaller firms experienced declines in output and new business.
Investment goods producers delivered the strongest performance, recording the fastest growth in production and new orders. In fact, rates of expansion within this segment reached 24-month and 51-month highs respectively. In contrast, intermediate goods manufacturers saw output growth slow to a four-month low, while consumer goods production contracted for the first time in three months. Both of these sectors also reported falling inflows of new work.
Export performance remained a bright spot. New export orders rose for the eighth successive month as overseas demand strengthened, particularly for UK-made consumer and investment goods. Manufacturers reported higher levels of business from mainland China, the United States, the Middle East and western Europe, indicating that international markets continue to provide valuable support for the sector.
The improvement in activity levels fed through to employment. Manufacturers increased staffing numbers for the fifth month in a row, with the pace of recruitment reaching a two-year high. Survey respondents linked hiring activity to rising production requirements, stronger order books and efforts to work through existing workloads. Both full-time and part-time recruitment contributed to the increase, while outstanding business fell after a slight rise in July.
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