UK manufacturing sector stabilises in June
By Michele Maatouk
Date: Wednesday 01 Jul 2020
(Sharecast News) - The UK manufacturing sector stabilised in June following a steep downturn sparked by the coronavirus pandemic, according to data released on Wednesday.
The IHS/Markit CIPS manufacturing purchasing managers' index rose to 50.1 from 40.7 in May, in line with the flash estimate and only just above the 50.0 mark that separates contraction from expansion. The manufacturing PMI had fallen to a record low in April.
Manufacturing production rose a little in June for the first time in four months as factories restarted, clients reopened and lockdown restrictions were eased. The intermediate goods sector saw the steepest growth, while consumer goods producers saw only a mild expansion.
On the downside, investment goods output fell again, albeit at a much reduced pace.
Employment fell for the fifth month in a row in June. While the rate of decline eased further from April's record, it remained among the steepest registered in the survey's 28-year history, with reports of redundancies, cost control efforts, workforce restructuring and the non-replacement of leavers.
Rob Dobson, director at IHS Markit, said: "June completed a marked turnaround in momentum in UK manufacturing, as the sector switched from April's record contraction back to stabilisation in the space of two months. Output edged higher and domestic demand firmed as lockdown restrictions loosened, factories restarted and staff returned to work. Business optimism also recovered to a 21-month high."
Dobson said further loosening of Covid restrictions on 4 July should allow for more gains in the coming months.
"Although the trend in new export business remains weak, that should also strengthen as global lockdowns and transport constraints ease further," he said, adding that the main focus is now shifting towards the labour market amid worries about a potential surge in job losses once the government support scheme ends.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN