There was a modest upswing in cost inflationary pressures, with input prices rising at the quickest pace since January 2023.

The seasonally adjusted S&P Global UK manufacturing purchasing managers’ index (PMI) registered 50.9 in June, down slightly from May's 22-month high of 51.2 and below the earlier flash estimate of 51.4.

The PMI has posted above the neutral 50 mark—signalling expansion—in each of the past two months.

Three out of the five PMI components were at levels consistent with improved operating conditions in June, as output and new orders expanded and suppliers' delivery times lengthened.

In contrast, stocks of purchases and employment both decreased.

June saw production volumes scaled up for the second successive month, as companies reacted to rising intakes of new orders and ongoing efforts to clear backlogs of work.

The rate of output growth was solid and only slightly below the 25-month high achieved in May. The expansion remained broad-based by sub-sector, with growth registered across the consumer, intermediate and investment goods categories.

Output growth was confined to large-scale producers, as contractions were signalled for both small and medium enterprises (SMEs). The same trend was seen for demand, with new orders rising at large firms and falling at SMEs.

New business intakes rose overall for the third time in June in the past four months. New order growth was linked to improved demand, greater levels of market activity, product promotions and an end of destocking at some clients.

The continued upturn in new business was mainly driven by the domestic market, as inflows of new work from overseas declined for the twenty-ninth month in a row.

There were reports of lower intakes from clients in North America, China, Germany, France, Italy, Sweden, the Middle East and Poland. Part of the latest decline was linked to shipping delays and rising freight costs, both of which were often the result of the Red Sea crisis.

Manufacturers maintained a positive outlook in June, reflecting expectations for a market recovery, planned growth strategies, new product launches and promotional activities.

Optimism stayed close to May's 27-month high, with 57 per cent of firms expecting output to rise over the coming year. Some firms noted feeling uncertain due the forthcoming general election, while others expected this to reduce following its conclusion.

Fibre2Fashion News Desk (DS)