UK manufacturing hits highest level of growth since July 2022

Commenting on the latest CIPS UK Manufacturing Purchasing Managers’ Index which has increased to 51.2 from 49.1 last month, Mike Thornton, national head of manufacturing at RSM UK, said: 

'Despite a slight blip falling to 49.1 last month, the manufacturing PMI has returned to growth at 51.2, reaching its highest level since July 2022. With future output, new export orders and new orders all hitting two-year highs at 78.3, 49.3 and 51.8, respectively, this steady upward trend has been building momentum since the second half of 2023. 

'Combine this uptick in demand with input prices easing to 52.8 and output prices remaining flat at 53.3, manufacturers will be in a position to start making back some margin - underpinning real signs of stabilisation, and even recovery.

'Industry has remained resilient despite stagnation in the economy and is now showing signs of recovery. However, this upturn is fragile, and industry needs greater clarity with a comprehensive industrial strategy, embedding digitalisation and decarbonisation, from the next Government. This framework is much-needed to deliver certainty – allowing manufacturers to make more informed decisions about strategic investment to support future growth.'

Tom Pugh, economist at RSM UK, said: 'As we suspected the weakness in the manufacturing PMI in April was just a blip and the overall upward trend has persisted. The fundamentals of the economy should continue to recover over the next year as inflation continues to fall and households’ real income rises. But there is a chance that the uncertainty associated with a general election campaign means confidence may take a temporary hit. Indeed, after yesterday’s disappointing inflation print and with the June MPC meeting coming just two weeks before the general election it is now very unlikely that we will get an interest rate cut before August.'