Key findings:
- UK manufacturing recovery continues in May despite rising price and supply chain pressures
- Input price inflation at near four-year high
- Supply chains remain under pressure
Comment:
Rob Dobson, Director at S&P Global Market Intelligence
“May saw the UK manufacturing upturn gather pace, as growth of production and business optimism both rose to three-month highs.
“The sustainability of the upturn remains in doubt, however. The recent upturn in new order intakes that is driving the expansion in output is heavily reliant on both manufacturers and their clients front-loading purchases to mitigate expected war-related price increases and supply chain disruption. This bounce will fade once customers have built up sufficient safety stocks.
“These price and supply factors are also having a direct impact on manufacturers, with cost inflation rising to a near four-year high and pressure on supply chains leading to material shortages and longer lead times. This will continue to constrain manufacturers and put growth at risk for as long as geopolitical uncertainty, war in the Middle East and risks to key transport routes such as the Strait of Hormuz continue to pose a threat.”
