UK manufacturing continues to grow_2

31 May 2007
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01 June 2007 | Antony Barton

The manufacturing sector maintained its strong start to 2007, according to the latest manufacturing purchasing managers' index (PMI).

The May CIPS/NTC PMI, where a figure above 50 indicates growth, recorded activity in the sector at 54.9. An improvement on April's performance of 54.1, it is also the highest growth rate in eight months. Production has increased for 23 months.

Companies said higher levels of new work led to the growth in production. Yet the report also points to increasing inflationary pressure.

Output prices reached 56.9, from 56.8 in April, making it the joint-highest rate in the seven-and-a-half year PMI's history. Companies linked these higher charges to increased input costs, which rose to 64.8 from 63.3 in April, reaching an eight-month high.

Some companies blamed a further deterioration in average vendor performance in May on a lack of spare capacity at suppliers' units, coupled with rising demand for raw materials. Delivery times fell to 43.7 from 44.9 in April, the greatest deterioration in six months.

* Further coverage of PMI reports is available at http://www.supplymanagement.com/pmi



SMjun2007

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