Orders bounce back to brake manufacturing's slide

30 June 2005
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01 July 2005 | Gareth Mytton

A small rise in new orders helped to slow the fall in UK manufacturing activity in June, according to the latest purchasing managers' index (PMI) report.

The overall PMI - a composite indicator of sector conditions from CIPS and NTC Research in which 50 indicates no change on the previous month - rose to 49.6, from 47 in May.

Strong demand from abroad - in particular, North America and the EU - fuelled the first rise in export orders this year and an overall increase in new orders (50.8).

There were falls in output, stocks of finished goods, employment, output prices, quantities of purchases and stocks of purchases. Input prices scarcely rose, at 50.5. Plastics prices fell, but upward pressures included electricity, oil, fuel and distribution costs. The strength of sterling against the euro helped to make some imports cheaper.

In the euro-zone, the manufacturing PMI rose to 49.9 in June, boosted - like the UK - by rising exports.

In the US, the Institute for Supply Management's (ISM) manufacturing report on business put the PMI at 53.8, a rise on May's 51.4. High energy costs and the strong dollar are major concerns to purchasers, warned Norbert Ore, chair of the ISM business survey committee, in an otherwise optimistic report.

• Coverage of previous months' manufacturing, construction and services PMI reports is available at http://www.supplymanagement.com/pmi.

• More information on the UK and euro-zone PMIs is available at www.ntc-research.com.

• The full text of the ISM reports on the US manufacturing economy for June and previous months is available at http://www.ism.ws/ISMReport/index.cfm.

SMjul2005

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