The UK manufacturing sector activity eased further and entered into contraction territory in the month of May, the latest survey report from IHS Markit showed this Monday.
The seasonally adjusted IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) slumped to thirty-four-month lows of 49.4 in May versus 52.0 expected and 53.1 last.
Key Points:
New orders and employment both decline.
Stockpiling activity halts following Brexit date delay.
Rob Dobson, Director at IHS Markit, commented on the survey:
“The UK manufacturing sector was buffeted by ongoing Brexit uncertainty again in May. The headline PMI posted 49.4, moving back into contraction territory for the first time since July 2016, the month directly following the EU referendum result. The trend in output weakened and, based on its relationship with official ONS data, is pointing to a renewed downturn of production.”
“New order inflows declined from both domestic and overseas markets, as already high stock levels at manufacturers and their clients led to difficulties in sustaining output levels and getting agreement on new contracts. Demand was also impacted by ongoing global trade tensions, as well as by companies starting to unwind inventories built up in advance of the original Brexit date. Some EU-based clients were also reported to have shifted supply chains away from the UK.”
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