Manufacturing recovery remains 'uncertain'_2

11 February 2010

1 September 2009

Activity in the UK manufacturing industry slipped back into contraction last month, as growth in new orders slowed.

According to the latest CIPS/Markit Manufacturing Purchasing Managers' Index - where a figure below 50 represents contraction - total activity in the sector registered 49.7 in August.

This was a drop from the revised figure of 50.2 registered in July (previously 50.8).

The growth in new orders slowed from July's 20-month high of 54.8 to 52.4. The level of new business was still enough to give way to an increase in manufacturing production.

Staff levels continued to decline, but at the slowest rate since June 2008. Average input costs and output charges declined further in August, but at slower rates than the month before.

David Noble, CIPS chief executive, said: "The future picture for the UK manufacturing sector is still uncertain, and concerns will remain that the improvements seen in recent months may have been temporary rather than a sustainable recovery.

"Although August saw the trend in output build on the momentum gained at mid-year, the moderation in the rate of new order growth is worrisome."

The Markit Eurozone Manufacturing PMI reached a 14-month high of 48.2 in August, up from 46.3 the month before.

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