UK manufacturing grows more than economists predicted
The UK’s manufacturing sector grew in May from April’s recorded 17-month low, according to the Markit/CIPS UK manufacturing Purchasing Managers’ Index (PMI).
The PMI recorded 54.4 points for the month of May for output, up from 53.9 points in April.
The recordings are both above the 50 points mark that separates growth from contraction.
Economists had forecast that the UK’s output would only reach 53.5 points on the PMI, the Guardian reported.
The growth is expected to be linked to a rise in finished goods inventories and less backlogs of work.
However, the growth may not be as promising as it initially appears, explains Rob Dobson, IHS Markit Director.
“At first glance, the mild acceleration in the rate of output growth and rise in the headline PMI would appear positive outcomes, given the backdrop of the slowdown seen in manufacturing since the turn of the year,” remarked Dobson.
“However, scratch beneath the surface and the rebound in the PMI from April’s 17-month low is far from convincing.”
“A slowdown in new order inflows meant the expansion in production was achieved only by firms working through their backlogs of work.”
“Weaker than expected sales, meanwhile, led to the largest rise in unsold stock in the survey’s 26-year history.”