Export demand was supported as economic conditions around the world improved significantly
A survey released on Thursday showed that UK manufacturing slowed growth in June.
The closely monitored index for IHS Markit CIPS manufacturing’s purchase managers fell from a record high to 63.9 from 65.6 in May. However, it is well above the level of stagnation 50.
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Increased production, new orders and employment are at the highest level in the nearly three years of research history.
While demand for manufacturers’ products has increased, companies have increased their spending as restrictions eased.
Export demand was supported by significant improvements in economic conditions around the world, bringing demand primarily from Asia, Europe and the United States.
The strong rise in the global market situation and the constraints introduced to combat the Covid-19 pandemic continued to bring considerable supply chains and price inflation pressures in June.
Average input costs rose at the fastest pace in our survey history, with three-quarters of manufacturers (77%) reporting an increase.
Commenting on the latest findings, IHS Markit Director Rob Dobson said:
“At the end of the second quarter, UK manufacturing maintained a near-sighted pace of expansion as reopening the economy at home and abroad helped increase production, new orders and employment. The rise in confidence and work backlog suggests that the current rise will be implemented more.”
“However, the sector remains plagued by rising cost inflation pressures as Brexit-related trade issues have exacerbated delays in global supply chains. The resulting widespread raw material shortage has led to the highest purchase price on record. It has been promoted to a degree, leading to an unprecedented rapid rise in sales prices, and there have also been extensive reports that supply issues have caused disruption to production schedules and prevented the restructuring of buffer stocks,” Dobson added. I did.
“The ongoing impact of inflation on capacity issues at both manufacturers and their suppliers will be an additional factor in maintaining headline inflation beyond the Bank of England’s 2% target in the coming months.”
