Input Cost Inflation in the UK Manufacturing Sector Reaches Highest Level in 17 Months in June

S&P Global has released the UK’s manufacturing PMI data for June.

The manufacturing PMI data in the country continued to grow in June, reaching 50.9. In May, the manufacturing PMI was at 51.2, the highest in the last 22 months.

However, input cost inflation in the sector reached its highest level in 17 months in June. Input costs recorded the fastest increase since January 2023.

Rob Dobson, Director at S&P Global Market Intelligence, commented on the data, stating that the manufacturing sector experienced its strongest growth period in the last two years, with growth continuing in June. He noted, “The performance of the domestic market continues its positive trend, providing a mature source for new contract gains. However, it is concerning that manufacturers report struggling to secure new business in many key markets, including the US, China, and mainland Europe, causing weak export performance.”

Dobson pointed out that despite relatively high optimism for the future among manufacturers in June, they are focused on reducing costs and maintaining cash flow. “This situation occurs against the backdrop of renewed cost inflation pressure, with input prices rising at the fastest rate since the beginning of 2023. This renewed upward movement in manufacturing prices will raise concerns among hawkish rate setters at the Bank of England about the potential stubbornness of underlying inflationary pressures,” he said.

source: prepared by Melisa Beğiç

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