TOP NEWS: UK Manufacturing Activity Improves But Still Under Pressure

(Alliance News) - The UK manufacturing sector rebounded in May but Covid-19 continues to severely ...

Alliance News 1 June, 2020 | 9:42AM
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(Alliance News) - The UK manufacturing sector rebounded in May but Covid-19 continues to severely hamper the sector, data from IHS Markit showed on Monday.

The IHS Markit/CIPS purchasing managers' index rose to 40.7 in May from a record low of 32.6 in April. May's flash reading had been 40.6.

Though an improvement, the reading remained well below the no-change mark of 50, meaning the UK manufacturing sector continued to contract in May - though at a more moderate rate than in April.

"The headline index is at its seventh-lowest level ever and at depths unseen outside of the current pandemic and the global financial crisis of 2008-09," IHS Markit noted.

Rates of contraction in output, new orders and new export business were among the sharpest in the survey's history across consumer, intermediate and investments goods. However, the rates of decline lessened from the survey records of the prior month.

Manufacturing employment fell for the fourth successive month in May, while the pandemic continued to weigh on business sentiment. Although rising to a three-month high, confidence remained downbeat by historical standards.

"Those who typically see the glass half empty will note that the UK manufacturing sector remained mired in its deepest downturn in recent memory...However, the glass-half-full perspective is one where the rate of contraction has eased considerably since April, meaning – absent a resurgence of infections – the worst of the production downturn may be behind us," said Rob Dobson, director at IHS Markit.

"However, changes to working practices, uncertainty about how long the Covid-19 restrictions may be in place for, weak demand and Brexit worries all suggest the UK is set for a drawn-out economic recovery," said Dobson. "This will make the 'new normal' one of the toughest recovery environments many manufacturers will ever have to face".

By Lucy Heming;

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