The upturn in UK manufacturing showed signs of losing momentum at the end of the second quarter.
Although output growth accelerated as companies continued to benefit from clients' strategic stockpiling, a softer uplift in incoming new orders suggested the impetus provided by this was already starting to fade.
The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) posted 52.5 in June, down from May's four-year high of 53.9 and the earlier flash estimate of 53.1. The PMI has signalled expansion in each of the past eight months.
Four of the five PMI sub-components were at levels consistent with improved operating conditions.
Output, new orders and employment all expanded and suppliers' delivery times lengthened. The positive signal suggested by the latter (vendor delivery times) may be slightly misleading, given it was mainly reflective of stretched supply chains as opposed to a substantive increase in demand for inputs.
Stocks of purchases fell following a solid rise in the prior survey month.
Manufacturing production expanded for the third month running in June, with the rate of growth improving to a 21-month high.
Rob Dobson, Director at S&P Global Market Intelligence, said: “The UK manufacturing sector ended the second quarter of the year on a positive note, with output expanding at the fastest pace since September 2024.
"Sustaining the upturn is becoming a bigger concern. Manufacturers are currently benefiting from client strategic stockpiling, as they safeguard against supply chain disruptions and expected price rises. A drop in the rate of growth of new work intakes suggests this boost is already starting to fade.
"Manufacturers' optimism about the year ahead also remains tepid, with many concerned about geopolitical tensions and uncertain over the future course of government policy.
"There was mixed news on the prices front. Although input cost inflation remained elevated as severely strained supply chains led to raw material shortages and higher vendor charges, the recent drop in energy prices has helped reduce the overall rate of inflation, leading to a similarly welcome slowing in the rate of increase of factory selling prices."
