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11th of August 2011
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UK manufacturing activity contracts in July

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by Kay Mitchell
”UK

The Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) has today revealed UK manufacturing contracted in July – the first time since the UK was in recession two years ago.

The closely-watched CIPS/Markit manufacturing PMI fell to 49.1 last month from a revised 51.4 in June.

The index is now below the crucial 50 mark, which separates contraction from expansion.

The reading surprised analysts who had expected the index to edge lower to 51.

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

Commenting on the data, David Noble, chief executive of the CIPS, said: “Alarm bells are ringing for the U.K. manufacturing sector, which has seen conditions deteriorate rapidly since the start of the year.”

Official data last week revealed the economy grew by just 0.2% in the second quarter and today’s figures suggest the third quarter has got off to a disappointing start.

Construction activity and service sector activity figures will be published later this week.

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