According to statistics taken from the latest Purchasing Managers' Index (PMI), the future outlook for the manufacturing sector looks very positive. Figures in May showed market resilience, with the sector sustaining most of the growth momentum gained during April.
UK manufacturing companies benefited most from the continued strength of the domestic market; however there has also been a steady increase in new export business, particularly within the immediate goods sector.
The ongoing development of the UK manufacturing market has positively impacted upon business and investment sentiment and increased much needed employment opportunities across regional areas to a 35 month high.
Commenting on the data, Mike Thornton, head of manufacturing at RSM, said:
‘Optimism for future production levels is at a 20 month high in this month CIPS Manufacturing PMI statistics offering greater assurance to the future of the sector. It’s great to see this level of sector growth and is indicative of both its diligence and resilience. Whilst it is positive to see such optimism in the industry, manufacturers will be aware that this is not the time for complacency.
‘Currently, manufacturers are successfully passing on the input cost as output costs remained elevated, which is positive news. However, it will be interesting to see when consumers start to feel the real effect of this change. Key inflation indicators, such as the Consumer Prices Index and Retail Price Index, are slowly moving northwards, but the real impact is yet to be felt which will have a profound impact on the UK economy.
‘In addition, the general election outcome is looking closer than previously expected – so manufacturers may need to prepare for more uncertainty in the short term, which in turn could have an impact on the Brexit negotiations. Staying on top of any political developments will enable manufacturers to respond quickly to any opportunities or challenges that a turbulent market may bring.’