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03rd of July 2011
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UK manufacturing activity hits 21-month low

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by Kay Mitchell

The Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) has today revealed UK manufacturing grew at its slowest rate in almost two years in June.

The closely-watched CIPS/Markit manufacturing PMI dived to a 21-month low of 51.3 last month from May’s reading of 52.

June’s reading was slightly lower than the 52.1 expected by analysts.

However, the index remains just above the crucial 50 mark, which indicates expansion and it has been above this level for almost two years.

Meanwhile, according to the survey, factories cut back on hiring, while new orders fell for the second month in a row.

The manufacturing sector, which accounts for around 13% of economic output, has been one of the bright spots in the UK economy, and today’s figures will again raise fears about the strength of the economic recovery.

Commenting on the data, Rob Dobson, senior economist at survey compiler Markit, said: “The manufacturing sector continued to slip closer to stagnation in June. The data will call into question the sector’s ability to play a major role in delivering a robust and sustainable economic recovery.”

Construction activity and service sector activity figures will be published early next week.

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News posted: July 1, 2011

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