UK manufacturing PMI hits 26-month high, driven by domestic orders
2 September 2024 
The UK Manufacturing PMI (Purchasing Managers’ Index) hit a 26-month high of 52.5 in August, up from 52.1 in July, with output, new orders and employment all rising. There were further signs of price pressures easing, as rates of inflation in input costs and selling prices both slowed. The S&P Global PMI has been above 50.0, indicating an expansion in the UK manufacturing sector, in five of the past six months (the exception being April).
The only European country with a higher PMI than the UK in August was Greece. Italy hit a five-month high of 49.4, while France recorded a seven-month low of 43.9, and Germany returned a five-month low of 42.4. In the US, manufacturing production fell for the first time in seven months during August, with the manufacturing PMI slipping from 49.6 in July, to 47.9
UK production increased for the fourth successive month in August, as companies raised output to satisfy rising new orders, and to clear previous contracts. The rate of expansion was close to July’s near two-and-a-half-year high.
The recent rebounds in output and new orders have led to the fastest rate of job creation in more than two years, especially among large-scale producers, although some small firms have also taken on new staff.
Most new orders are coming from the UK domestic market, with export orders falling for the thirty-first consecutive month.
“The trend in export orders a key cause for concern, with new business from overseas having fallen continuously since early in 2022,” comments S&P Global Market Intelligence director, Rob Dobson. “UK manufacturers are experiencing difficulties in securing new contract wins overseas due to weaker demand from Europe, a slowdown in mainland China, freight delays, competitiveness issues, high shipping costs, global conflicts and political uncertainty. Many of these issues are also impeding imports which, while benefiting domestic suppliers, is causing supply chain-related production constraints as witnessed by a further marked lengthening of supplier delivery times.
UK manufacturers are bullish about the future with 61% predicting that their production will be higher in a year’s time, with just 6% expecting a decline.
