-Adds Detail To Version Transmitted At 0842 GMT
-UK June Manufacturing 48.6 Versus 45.9 in May
-Headline Activity Number Comes In Above Median 46.6 Forecast
LONDON (MNI) – The UK manufacturing sector continued to contract in
June but at a much slower pace than in May, according to the
Markit/Chartered Institute of Purchasing and Supply survey.
The headline June CIPS manufacturing index, from Reuters, rose to
48.6 from 45.9 in May. The 4.3-point monthly fall in May was the second
steepest in the survey’s history. Analysts had expected some bounce back
in June, with the median forecast for a 46.6 outturn.
The June survey will provide some comfort to the Bank of England,
as it offers further evidence of inflation pressure easing rapidly. June
manufacturing input prices fell at their fastest pace since May 2009.
Falling input prices, however, were not passed on into lower output
prices.
Average selling prices rose in June with CIPS reporting companies
“moved to protect their margins and catch up with the strong input cost
increases seen earlier in the year.”
New orders rebounded, rising to 47.0 from May’s 42.0, but were
nevertheless still well below the 50 breakeven level.
The data support the view manufacturing will make a negative
contribution to second quarter GDP.
For the second quarter as a whole, the average PMI reading was
48.2, the weakest outturn since Q2 2009. Manufacturing accounts for
10.2% of UK GDP, according to the latest official data.
A Markit economist cautioned against placing much weight on the
monthly data.
Rob Dobson, Senior Economist at Markit, said: “Manufacturing is
seeing lots of volatility at the moment, due to factors such as the
Jubilee holidays, making it very difficult to see what the underlying
trend is.”
“However, there’s no denying that the second quarter as a whole is
looking weaker than the first quarter, suggesting manufacturing output
may have contracted by at least 0.5% and therefore acting as a
substantial drag on the economy for the fourth successive quarter,”
Dobson added.
-London newsroom: +44 207 862 7491; email: drobinson@marketnews.com
[TOPICS: MABDS$,M$B$$$]