The UK Purchasing Managers’ Index (PMI) for the manufacturing sector reached 52.1 in July, marking an 18-month high, as reported by financial services company S&P Global. This rise indicates a strengthening in output and new orders, with staffing levels also increasing for the first time since September 2022.
Economic revival prospects and a reduction in political uncertainty have bolstered confidence within the sector, with 60% of surveyed companies expecting higher output over the next year. This optimism is one of the highest recorded in the past two and a half years.
After a prolonged period of decline, there are signs that the trend in new export business is nearing stabilisation. Nevertheless, inflationary pressures persist, with input costs hitting their highest level in 18 months.
The ongoing crisis in the Red Sea and related freight issues are significantly impacting prices, compelling producers to remain focused on cost containment and cash flow protection. Additionally, selling prices are increasing at their fastest rate since mid-2023.
Rob Dobson, director at S&P Global Market Intelligence, noted that policymakers are likely to proceed cautiously with monetary policy due to these shifting inflationary pressures from services to manufacturing.
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.
