UK July closing manufacturing PMI 52.1 vs. 51.8 prelim

• Final Manufacturing PMI 52.1 vs. 51.8 expected and 50.9 prior.

Key findings:

• Production growth fastest since February 2022.
• Input price inflation rises to 18-month high.

Comment:

Rob Dobson, Director at S&P Global Market Intelligence:

“UK manufacturing has started the second half of 2024
on an encouragingly solid footing. July saw growth of
production and new orders strengthen and staffing
levels rise for the first time since September 2022.
Hopes for an economic revival and reduced political
uncertainty took confidence to one of its highest
levels for two-and-a-half years, with 60% of companies
surveyed now forecasting output will rise over the
coming 12 months. There were also further signs that
the trend in new export business is close to stabilising
following a prolonged period of decline.”

“Inflationary pressures remain a blot on the copybook,
however, with input costs rising to the greatest extent
in one-and-a-half years. The ongoing Red Sea crisis and
associated freight issues are having a severe impact on
prices which are then sustaining a focus on cost-caution
and cash flow protection at manufacturers. This is
leading to cutbacks in purchasing and a drive to leaner
inventory holdings.”

“Selling prices are also rising at the quickest rate since
mid-2023. Policymakers are likely to take a cautious
approach to loosing monetary policy amid these signs
that inflationary pressures may be pivoting away from
services and towards manufacturing.”