UK Manufacturing Activity Climbs to Highest in Four Years

(MENAFN) Britain's manufacturing sector climbed to its strongest level in four years last month, sustaining a seven-month growth run even as surging input costs and supply chain strains threatened to cloud the outlook, S&P Global reported Monday.

The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers' Index (PMI) ticked up to 53.9 in May from 53.7 in April, holding comfortably above the 50-point threshold that separates expansion from contraction for a seventh straight month.

Growth was underpinned by firming production output and a healthy flow of new orders. Export demand also brightened, with manufacturers reporting stronger sales across a broad range of markets including China, Europe, Japan, North America, and South Korea.

Cost Pressures and Supply Chains Bite
The headline gains came at a price. S&P Global flagged that manufacturers continued to absorb steep input cost increases, with purchasing price inflation accelerating to its sharpest pace in nearly four years.

Supply chain conditions remained equally strained. Firms pointed to persistent delivery delays attributed to the ongoing Middle East conflict and escalating disruptions affecting cargo transit through the Strait of Hormuz.

Recovery Gaining Momentum — But Fragile
Rob Dobson, economics director at S&P Global Market Intelligence, said the sector's recovery gathered pace in May, with both output growth and business confidence rising to three-month highs.

Yet Dobson sounded a note of caution, warning that the durability of the upturn remains uncertain, noting that some recent growth was fueled by manufacturers and customers bringing forward purchases to avoid expected price increases and supply disruptions.

He cautioned that momentum could soften once customers complete their precautionary stock-building cycles, while persistent geopolitical uncertainty and mounting risks to critical shipping corridors continue to cast a shadow over the sector's near-term trajectory.

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