UK manufacturing recovery strengthens

London: The UK Purchasing Managers’ Index (PMI) for the manufacturing sector rose 52.1 in July, reaching an 18-month high, according to data released on Thursday.

Growth in output and new orders strengthened in July and staffing levels rose for the first time since September 2022, financial services company S&P Global reported.

Prospects for economic revival and reduced political uncertainty have pushed confidence to one of the highest levels in two-and-a-half years, with 60% of companies surveyed forecasting increased output in the next 12 months, it said.

Despite a long period of decline, there were other signs that the trend in new export business was close to stabilizing.

However, inflationary pressures continue to negatively affect the outlook, with input costs reaching their highest level in a year and a half.

The ongoing Red Sea crisis and associated freight issues are having a severe impact on prices, which continues to keep producers focused on cost containment and cash flow protection, S&P Global said.

“Selling prices are also rising at the quickest rate since mid-2023. Policymakers are likely to take a cautious approach to loosing monetary policy amid these signs that inflationary pressures may be pivoting away from services and towards manufacturing,” said Rob Dobson, director at S&P Global Market Intelligence.