UK manufacturing sector hits the buffers
The UK manufacturing sector tipped into contraction territory for the first time in almost three years last month as Brexit-related stockpiling came to a halt.
The closely monitored IHS Markit/cips manufacturing purchasing managers’ index (PM I) showed a reading of 49.4 for May, down from 53.1 the month before.
The figure dipped below 50, the marker which separates growth from contraction, for the first time since July 2016.
Large inventories prior to the original 29 March Brexit deadline meant that“manufacturers reported increased difficulties in convincing clients to commit to new contracts during May”, the PMI report noted.
The total volume of new business orders fell for the first time in seven months.
Rob Dobson, director at IHS Markit, said: “The UK manufacturing sector was buffeted by ongoing Brexit uncertainty again in May. The trend in output weakened and, based on its relationship with official ONS data, is pointing to a renewed downturn of production.”
Duncan Brock, group director at the Chartered Institute of Procurement and Supply, added :“It has now become obvious that the stock piling activities of the last few months were propping up the sector’s performance.”
Howard Archer, chief eco - nomic advisor to the EY Item Club, said: “It is clear that there will be significant payback for the manufacturing sector in particular and the economy overall in Q2 while some of the stockpiling that occurred in the first quarter is unwound.”