The UK manufacturing sector experienced a resurgence in May, with production reaching its highest level in over two years, according to final survey data released by S&P Global. The manufacturing Purchasing Managers’ Index (PMI) rose to 51.2 in May from 49.1 in April, marking the highest reading since July 2022, though slightly below the initial estimate of 51.3. Notably, the PMI has been above the critical 50.0 mark in two of the last three months, indicating expansion in the sector.
Manufacturing output saw its fastest increase since April 2022, driven by improved new work intakes, better market conditions, and efforts to fulfil existing contracts. This growth was primarily focused on the domestic market, as new export orders declined for the twenty-eighth consecutive month. Alongside this recovery, business sentiment also improved, with optimism among manufacturers reaching its highest level since February 2022.
Despite the positive trends in production and sentiment, the survey revealed some ongoing challenges. Employment in the sector fell for the twentieth consecutive month, and inventories of finished goods and purchases continued to dwindle. There was a slight increase in input buying in May, ending a 22-month streak of reduced purchasing activity. However, suppliers’ delivery times lengthened for the fifth consecutive month, largely due to transportation issues such as the ongoing crisis in the Red Sea.
Input costs continued to rise for the fifth month in a row, although at a slower rate than in April. The data presented a mixed picture regarding trends in purchasing costs. Notably, the rate of output price inflation reached its highest level in a year, having strengthened over the past five months.
Likewise Group PLC (LON:LIKE) is a distributor of floorcoverings and matting and has the opportunity to consolidate the domestic and commercial floorcovering markets to become one of the UK’s largest distributors in this sector.
