The data collection window for this survey was between June 13 and 27. Almost all of the responses included in the final index readings were received prior to the end of 23rd June (the day of the UK’s EU referendum).
June data signalled a faster rate of increase in UK manufacturing production, underpinned by a solid acceleration in inflows of new work. New orders rose at the quickest pace since last October, reflecting the ongoing strength of the domestic market and a marginal uptick in new export business.
Where an increase in new work from overseas was recorded, companies linked this to higher sales to the USA, mainland Europe (especially Germany, Italy, Spain and the Benelux nations), Russia and East Asia.
Sector data pointed to a broad-based improvement in operating conditions during June. Output and new orders increased across the consumer, intermediate and investment goods industries, with only the latter failing to also see gains in new export business.
The trend in manufacturing employment remained negative during June. Job losses were reported for the sixth straight month, with all three of the broad sub-sectors covered by the survey seeing declines.
Lower staffing levels were linked to a combination of redundancies, natural wastage, efficiency gains and efforts to control costs.
June data signalled a modest increase in purchasing activity among UK manufacturers, halting a four-month sequence of decline. This exerted pressure on suppliers’ capacity, leading to a further lengthening of vendor lead times.
Average input costs increased for the second successive month in June. Although the rate of inflation was only moderate, and well below its long-run trend pace, it was nonetheless the fastest since February 2014. Companies reported a wide range of raw materials as up in price, including food products, oil, polymers, resins and steel.
June also saw a mild increase in selling prices, as manufacturers passed on higher costs. Output charges rose at similar rates across the consumer, intermediate and investment goods sectors.
Lee Hopley, chief economist at EEF, said: “The latest PMI gives us another positive data point for the UK’s manufacturing sector. The pick-up in output and sales components and the relative strength of the manufacturing PMIs across most of Europe would, in other circumstances, have reinforced our view that the worst of the downturn seen in the previous 18 months was now behind us.
“But, with economic and political uncertainty ramping up in the wake of the referendum, all the data is showing us is what we could have won. The future path of demand, investment and employment across the sector is very unclear and while we continue to see fundamental strengths across many parts of industry, short term data movements are nigh-on impossible to predict.”
