UK manufacturing edges back to growth

The manufacturing sector recovered back to growth status in June, marking a tentative “turnaround in momentum” since the outbreak of COVID-19, according to experts.

The UK Manufacturing Purchasing Managers’ Index (PMI) for June rose to 50.1, up from 40.7 in May and breaking through the all-important ‘50’ barrier - indicating sector growth - for the first time since the COVID-19 outbreak earlier this year.

Manufacturing production rose for the first time in four months as more factories restarted operations, clients reopened and lockdown restrictions were eased.

Only the investment goods sub-sector saw output fall, with industries such as automotive continuing to struggle. According to the Society of Motor Manufacturers and Traders (SMMT), just 5,314 vehicles rolled off UK production lines in May despite two-thirds of factories reopening - a 95 per cent drop compared to last year.

Overall however, business sentiment among UK manufacturers rose to a 21-month high in June, with 63 per cent of businesses forecasting that output would rise over the coming year.

There are still troubling signs, such as new export business continuing to fall for the eighth straight month and employment falling for the fifth consecutive month, but industry experts said June’s results still represented a notable uplift for the sector.

Rob Dobson, Director at IHS Markit, which compiles the PMI data, commented:

“June completed a marked turnaround in momentum in UK manufacturing, as the sector switched from April's record contraction back to stabilisation in the space of two months. Output edged higher and domestic demand firmed as lockdown restrictions loosened, factories restarted and staff returned to work.

“Although the trend in new export business remains weak, that should also strengthen as global lockdowns and transport constraints ease further.”

Read more Coronavirus guidance for manufacturers