UK manufacturing growth hits 16-month low in May -PMI By Reuters

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© Reuters. FILE PHOTO: Smoke rises above a factory at sunset in Rugby, Britain February 10, 2021. REUTERS/Matthew Childs TPX IMAGES OF THE DAY

LONDON (Reuters) – British manufacturing activity expanded in May at the weakest rate since January 2021, as producers of consumer goods struggled against a worsening cost-of-living crunch, a survey showed on Wednesday.

The final estimate of the S&P Global (NYSE:) UK Manufacturing Purchasing Managers’ Index (PMI) fell to 54.6 in May from 55.8 in April, unchanged from a preliminary “flash” reading.

“Growth in the UK manufacturing sector eased during May, as rates of expansion in output, new orders and employment all decelerated,” S&P Global, which produces the PMI, said.

Costs paid by manufacturers and selling prices again rose rapidly last month, but at a slightly slower pace than first suggested by the flash reading.

A separate report from the Institute of Directors showed confidence in the economy among business leaders slid last month to its lowest since October 2020. Inflation – which hit a 40-year high of 9% in April – was their top concern.

Another survey of businesses from the Confederation of British Industry showed they expect barely any growth over the next three months.

Manufacturing exports, a weak point in Britain’s recovery from the COVID-19 pandemic, continued to struggle, the PMI showed.

New orders from abroad contracted in May at the fastest rate since June 2020. Respondents cited Brexit problems, transport delays and the war in Ukraine.

Unlike the much larger services sector, manufacturing output has yet to regain its pre-pandemic level and remained 1.0% below it in March, according to official data.

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