BRITISH manufacturers reported the slowest growth in more than a year for August, hinting at a slowdown for the UK’s economic recovery in the second half of the year.
Markit and the Chartered Institute of Purchasing & Supply’s purchasing managers’ index fell to just 52.5, the firms said yesterday. Although the figure is above the neutral 50 measure, it is the lowest since June last year when the UK was showing the first signs of more solid growth.
Markit analysts warned yesterday that measures of output and new orders have slipped by seven points since their positions at the beginning of the second quarter.
Similarly, the sector’s significant contribution to the UK’s rapidly declining unemployment is now under threat – job creation rose again, but at the slowest pace in 14 months.
Large-scale manufacturers actually cut their staffing levels last month, the latest figures show.
“Ongoing geopolitical tensions will likely weigh on the manufacturing sector in the short-run, particularly given that growth in the Eurozone will suffer owing to the sanctions against Russia,” said Colin Bermingham of BNP Paribas.
Manufacturing industry body EEF also noted the more sluggish conditions in other countries, weighing against growth.
“The picture emerging from all manufacturing surveys is a softening in the pace of expansion, though the sector hasn’t moved into the slow lane, is still growing and remains on track for a solid increase in output this year overall. But we’ve seen a range of factors start to weigh on demand for UK goods, particularly from flagging overseas markets,” said EEF chief economist Lee Hopley.
Despite this, the group expects 3.3 per cent growth from the sector this year.