UK manufacturing PMI at five-month high in June before Brexit

The UK manufacturing sector saw a modest improvement in June, rising to a five-month high.

The Markit/CIPS UK manufacturing purchasing managers’ index increased to 52.1 from a revised reading of 50.4 in May. Economists had been expecting a reading of 50.2.

New orders rose at the fastest pace since last October, reflecting a strong domestic market and a marginal uptick in new export business.

However, Markit pointed out that 99% of survey responses were received before the end of 23 June, which was the day of the EU referendum.

Rob Dobson, senior economist at survey compilers Markit, said: “Whether this growth recovery can be sustained will depend heavily on whether the current financial and political volatility spills over to the real economy.

“While the Bank of England remains poised to act if needed and the UK’s trading relationships are unchanged during the two-year negotiation period, there’s a clear risk that ongoing uncertainty will have at least some short term impact on manufacturing during the coming quarters. The big question is whether any negative impact from uncertainty can be partly offset by a boost to exports resulting from the fall in the pound.”