UK manufacturing sector hits high but dairy costs up
Growth in the UK’s manufacturing sector hit a 14-month high in May but dairy purchasing costs increased, according to the Markit/CIPS Purchasing Managers’ Index (PMI).
The PMI index reached 51.3 last month compared with 50.2 in April – with a figure above 50 indicating expansion.
Rob Dobson, senior economist at survey compiler Markit, said: “The UK manufacturing sector had a spring in its step in May, as a brightening domestic market led to faster growth of output and new orders. One of the more positive features of the expansion is its broad-base, with producers of consumer, intermediate and investment goods all reporting stronger output growth.
‘Stronger than expected demand’
“Output is also likely to be raised further in the coming months, as firms refill warehouses after stronger than expected demand has led to a sharp depletion in finished goods stocks. The tentative return to job creation in the sector in May also suggests that manufacturers are becoming more confident in the outlook.”
While average input prices fell for a second month in a row during May – with significant falls for intermediate and investment goods producers – consumer goods manufacturers reported a big increase in purchasing costs. The highest rises were recorded for dairy, paper and timber prices.
