Manufacturing growth slows as Brexit weighs

manufacturing sector. Input cost inflation remained elevated in July, CIPS noted, amid rising commodity prices and shortages of some raw materials.

As manufacturers passed some of the cost increases on to customers, factory gate prices rose at their fastest pace since February.

Rob Dobson, director at survey compiler IHS Markit, said: “UK manufacturing started the third quarter on a softer footing, with rates of expansion in output and new orders losing steam.

“The upturn in the sector has eased noticeably since the back end of 2017, meaning that manufacturing has failed to provide any meaningful boost to headline GDP (gross domestic product) growth through the year-so-far.”

He added: “The July survey data also shows that the performance of the sector is becoming more uneven, with solid output growth in the investment goods industry being largely offset by intermediate goods production contracting for the first time in two years.

“As the intermediate goods sector supplies other manufacturers, taken alongside weaker growth of total new orders and a drop in business confidence to a 21-month low, this all suggests industry is unlikely to exit this soft patch in the near future.”

Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “The Markit/cips… survey points to the manufacturing sector faltering in July after a weakened performance over the first half of 2018.

“Disappointingly for future output prospects, new orders growth slowed to a 13-month low in July.”