Downturn in UK manufacturing sector deepens in June

The downturn in the UK manufacturing sector deepened in June, according to data released on Monday.

The S&P Global/CIPS manufacturing purchasing managers’ index declined to a six-month low of 46.5 from 47.1 in May. This marked the 11th month of contraction, although it was above the flash estimate of 46.2.

The survey showed that all five of the subcomponent indices - output, new orders, stocks of purchases, employment and suppliers' delivery times - were at levels consistent with weaker operating conditions.

Rob Dobson, director at S&P Global Market Intelligence, said: "Producers are being hit by weak domestic and export market conditions with clients showing a greater reluctance to commit to spending due to market uncertainty, increased competition and elevated costs. This is also impacting business optimism and stoking fears among some manufacturers that client spending may shift to lower cost rivals and markets.

"Although some respite is being offered in the short-term by reduced pressures on supply chains and costs, these remain a symptom of the current weakness of demand faced by the sector and are therefore unlikely to play a role in boosting production moving forward. Manufacturers therefore remain in defence mode, looking to cut back spending on purchasing and employment wherever possible and release capital tied up in stocks."