UK Manufacturing Growth Slows Amid Weaker Demand and Rising Costs
The UK manufacturing sector expanded at a slower pace in July than expected, according to the S&P Global Manufacturing PMI. The reading of 51.9 was below the consensus forecast of 52.8 and marks a slowdown from June's 53.2. Despite still indicating growth, manufacturers cited weaker domestic demand and a continued drag from export markets, particularly from the European Union and Asia.
Input cost inflation accelerated in July, driven by higher energy prices and supply chain disruptions, which squeezed profit margins and dampened business confidence. The slowdown raises questions about the resilience of the UK's economic recovery, with manufacturing accounting for around 10% of GDP.
The Bank of England's recent interest rate hikes may be curbing business investment and consumer spending, affecting manufacturing orders. Economists note that the weaker PMI could influence the Bank's next policy decision as it balances inflation concerns against slowing growth.