UK manufacturing growth slows in August amid supply chain issues

UK manufacturing growth slowed to a five-month low in August amid supply chain issues, according to a survey released on Wednesday.

The IHS Markit/CIPS manufacturing purchasing managers’ index declined to 60.3 from 60.4 in July . Nevertheless, it remained above the 50.0 mark that separates contraction from expansion and above the long-run average of 51.9.

The survey found that manufacturers continued to face rising constraints caused by supply chain issues. Shortages of inputs and delivery delays disrupted production schedules, leading to slower output growth, and also marked increases in input prices. Companies nonetheless still achieved solid gains in output, new orders and employment.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: "August’s results were almost a carbon copy of the previous month where recovery for manufacturers continued, but there were signs of stagnation and the rise in overall activity slipped back to the weakest for half a year. Businesses were thwarted by brittle supply chains struggling with shortages, port and transportation difficulties as delivery times stretched not to days or weeks, but months for some goods.

"New orders continued to flow in for the seventh month in a row, but a mismatch between supply and demand is affecting the UK economy. There is a question mark over whether supply chain managers have ordered early enough to fulfil customer needs, as the continuing deterioration in supplier performance, close to last year’s pandemic lows could result in meagre offerings on shelves in the shops in the coming months."