UK manufacturing growth strikes four-year high despite rising inflation
Activity across UK factories grew at the fastest pace for four years last month despite pressure from soaring inflation, according to new figures.
The S&P Global UK manufacturing PMI survey, watched closely by economists, showed a reading of 53.9 in May, up slightly from 53.7 in April.
Any reading above 50 indicates that activity is growing while any score below means it is contracting.
It was higher than expected by analysts and the initial flash estimate of 53.7 reported late last month.
Nevertheless, economists indicated that the acceleration in manufacturing growth might not last long.
Rob Dobson, director at S&P Global Market Intelligence, said: โMay saw the UK manufacturing upturn gather pace, as growth of production and business optimism both rose to three-month highs.
โThe sustainability of the upturn remains in doubt, however.
โThe recent upturn in new order intakes that is driving the expansion in output is heavily reliant on both manufacturers and their clients front-loading purchases to mitigate expected war-related price increases and supply chain disruption.
โThis bounce will fade once customers have built up sufficient safety stocks.โ
Mondayโs data showed a second consecutive month of improvement, despite a dip from the consumer goods sector.
New work increased for the sixth successive month, with higher demand from domestic and overseas clients.
Export business lifted on the back of reports of improved demand from mainland China, Europe, Japan, North America and South Korea.
The new research also however pointed towards heightened inflation for firms and their customers.
Purchasing costs accelerated to a โnear four-year highโ, reflecting increased prices for chemicals, electronics, energy, fuel and other products.
Firms mentioned a number of factors contributing to this, including the Middle East, commodity markets, geopolitical strife and supply chain issues.
Average selling prices increased at the fastest pace since July 2022 as a result, with firms passing on cost increases.
