Growth in British manufacturing activity slowed last month from a 22-month peak in May as ongoing shipping disruptions in the Red Sea contributed to a drop in demand from overseas customers, a survey showed on Monday.
S&P Global’s UK manufacturing purchasing managers’ index fell to 50.9 in June from 51.2 in May. The final reading was lower than the 51.4 in June’s provisional data.
S&P said the overall picture was positive, with production and new orders both increasing, but employment declined, delivery times lengthened and manufacturers’ input costs rose at the fastest pace since January 2023.
“Shipping problems resulting from the Red Sea crisis, low inventory at suppliers, insufficient supplier capacity and port problems have all led to longer delivery times,” S&P said.
While production and overall new orders grew at near their fastest pace in two years, export orders fell for the 29th straight month, due to shipping delays and high freight costs.
International shipping has been disrupted since November by attacks launched by Yemen’s Houthi militants, an Iran-allied group that says the attacks are in solidarity with Palestinians in the war between Israel and the militant Islamist group Hamas.
Many ships have chosen to avoid the Red Sea route to the Suez Canal and instead take the longer route around the southern tip of Africa.
Official figures on Friday showed that Britain’s manufacturing sector – which accounts for 10% of the economy – grew at a quarterly pace of 1.1% in the first three months of 2024, its second-strongest quarterly expansion since the start of 2021.
The volume of goods exports fell 3.5% in the first quarter, although the UK’s Office for National Statistics said this largely reflected trade in non-monetary gold – an erratic element which often distorts figures. British trade statistics. (Reporting by David Milliken, editing by Christina Fincher)
