The UK manufacturing sector showed signs of stabilizing in June, following the steep downturn caused by the coronavirus, or Covid-19, pandemic, final data from IHS Markit showed Wednesday.
The Chartered Institute of Procurement & Supply/ IHS Markit manufacturing Purchasing Managers’ Index rose sharply to 50.1 in June from 40.7 in May. The reading came in line with the flash estimate.
As factories restarted, production increased slightly for the first time in four months in June. Incoming new business also showed signs of stabilizing in June.
Domestic market demand improved as lockdown restrictions were loosened, while new export business fell for the eighth straight month.
Employment decreased for the fifth consecutive month in June. Although the rate of decline eased further from April’s record it remained among the steepest registered in the 28-year survey history.
On price front, the survey showed that cost inflationary pressure remained subdued. Although input prices increased at the fastest rate in a year, the pace was mild compared to the survey average. Output charges also increased in June.
Over 63 percent of manufacturers forecast that output would rise over the coming year.
The planned loosening in Covid-19 restrictions on the July 4 should aid further gains in coming months, Rob Dobson, director at IHS Markit, said. The main focus is now shifting towards the labour market, he said.
Dobson noted that economic conditions will need to improve markedly across the UK, or some support retained, if the labor market downturn is to avoid becoming more entrenched through the remainder of the year.
Source: Read Full Article