The S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) rose in July to 52.1 from 50.9 in June which is the highest figure since the middle of 2022. With this new high, British manufacturers have been able to breathe a sigh of relief.
In the same month however, Make UK published an analysis which found that the UK had fallen out of the global top 10 of the largest manufacturing economies, a position which hasn’t been seen since 2012.
With this rollercoaster of figures, positives and negatives have been identified which give insight into the future of UK manufacturing.
Output Growth and the Increase of New Orders
Of the variables which make up the PMI, output and new orders were noted as major contributors to the high figure. The majority of those surveyed also noted that they have forecast further output rises due to increases in new business and innovative product launches.
After a few years of economic uncertainty, factors such as the general election and improved customer demand have also instilled confidence amongst British manufacturers, creating an aura of optimism.
Employment Figures Rise
Workforces in the services sector recorded a significant rise while in other sectors, figures have stabilised which is contrary to the drops in employment which have been experienced over the past 2 years.
This figure goes hand in hand with the growth in output as it appears employee shortages are easing. Make UK also reported that manufacturing jobs are providing higher salaries with the average £38,769 salary exceeding the wider economy average of £35,404.
Global Position Falls
As previously mentioned, the UK has fallen out of the top 10 manufacturing nations, being surpassed by Mexico and Russia. The USA, China and Germany sit within the top 4 nations, and it’s no coincidence that these countries have bolstered long-term industrial strategies.
The UK’s lack of industrial strategy will become more visible in global lists and this is the reason for change amongst policy makers. The PMI increase indicates that manufacturers are working hard to build new business and create a strong workforce. Therefore, with further governmental support, these efforts could benefit the UK’s global ranking.
In the run up to their appointment, Labour had expressed commitment to a modern industrial strategy, and experts now note that this new strategy should go beyond 2030 to set out robust actions. This will not only benefit UK manufacturers but also the general economy.
With the election still fresh and heightened lobbying from manufacturers, the manufacturing landscape may be set to change.
Helping You Navigate the Changing Landscape
As manufacturers of cold forged components and fasteners since 1939, we have supported UK manufacturing for decades now, through our contribution to the community, reliable product quality and supply chain management services.
We would be delighted to discuss how we could help your business, simply contact us today to start a discussion.
Sources:
https://www.spglobal.com/marketintelligence/en/mi/research-analysis/flash-pmi-shows-uk-businesses-gaining-confidence-as-selling-prices-rise-at-slowest-rate-for-3-years-Jul24.html
https://www.makeuk.org/insights/publications/uk-manufacturing-the-facts-2024