UK manufacturing remained in expansion in August, though momentum softened. PMI Manufacturing eased from 51.9 to 51.7, a five-month low but still above 50 for a tenth consecutive month and above flash estimate of 51.5. Output increased for a fifth straight month, although at slowest pace since April, while new order growth also moderated. Export demand remained firmer, with new export business rising for an eighth consecutive month on stronger orders from mainland China, US, Middle East and Western Europe.
Labour and confidence indicators were more encouraging. Employment rose for a fifth month and at fastest pace in two years, supported by higher production requirements, improved order inflows and efforts to clear backlogs. Business optimism also climbed to a six-month high, with almost half of surveyed manufacturers expecting higher production over next 12 months. Performance remained uneven across sectors, however: investment goods recorded strongest growth, while small manufacturers saw output and new orders decline and consumer-goods production fell for first time in three months.
Cost and supply pressures continued to ease. Input price inflation slowed for a third straight month to weakest since February, while supplier delivery delays were least severe in six months. Manufacturers still faced elevated costs linked to energy volatility, supply constraints, geopolitical tensions and transport disruption, but moderation on both cost and supply fronts offered some relief. Overall, August survey points to continued expansion, but with softer output and orders offset by stronger hiring, confidence and export demand.
Data Summary
| Indicator | August | July | Trend |
|---|---|---|---|
| PMI Manufacturing | 51.7 | 51.9 | Five-month low; 10th straight month in expansion |
Components
| Component | Trend |
|---|---|
| Output | Rose for fifth straight month; slowest growth since April |
| New Orders | Growth slowed |
| New Export Orders | Rose for eighth straight month |
| Employment | Fastest growth in two years |
| Business Confidence | Six-month high |
| Investment Goods Output | Strongest growth in 24 months |
| Investment Goods New Orders | Strongest growth in 51 months |
| Consumer Goods Output | Fell for first time in three months |
| Input Cost Inflation | Slowed for third straight month; weakest since February |
| Suppliers’ Delivery Times | Least marked delays in six months |
| Stocks of Purchases | Fell for third straight month |
| Backlogs of Work | Fell after mild increase in July |
Key Takeaways
- UK PMI Manufacturing eased from 51.9 to 51.7, but remained above 50 for a tenth consecutive month.
- Output and new order growth both slowed, pointing to softer momentum.
- New export business increased for an eighth straight month, supported by demand from China, US, Middle East and Western Europe.
- Employment rose at the fastest pace in two years, while business confidence reached a six-month high.
- Investment goods were strongest segment, while small manufacturers and consumer-goods producers were weaker.
- Input cost inflation eased to its lowest since February, while supply delays were least severe in six months.
- Overall picture remains expansionary, but growth is becoming more uneven beneath headline.
