A mild revision higher to the initial estimate but the headline reading is still a 4-month low. Output contracts once again with the fall in new orders and employment both accelerating. S&P Global notes that:
“The UK manufacturing downturn deepened in May, with
output, new orders and employment all falling at increased
rates. Manufacturers are finding that any potential boost
to production from improving supply chains is being
completely negated by weak demand, client destocking
and a general shift in spending in the UK away from goods
to services. These factors are also driving a broad decrease
in demand from overseas amid reports of lost orders from
the US and mainland Europe. The retrenchment in export
demand is also being exacerbated by some EU clients
switching to more local sourcing to avoid post-Brexit trade
complications.
“
Although near-term conditions remain challenging
overall, manufacturers are still finding reasons for
optimism including brighter news on the price and supply
fronts. Average input costs fell for the first time in three-and-a-half years, allowing some firms to maintain efforts
to repair and protect margins damaged by a long and often
severe period of cost inflation . The recent healing in global
supply chains is also continuing apace, with lead times
shortening to a near record extent in May.”
