Follow us :

UK manufacturing sector scrapes back to growth in May

sourceBBC NEWS

publisherAlexa Zeng

time2016/06/03

UK manufacturing activity rose slightly in May, raising concerns over the economy's strength in the run-up to the 23 June European Union referendum.

The Markit/CIPS manufacturing Purchasing Managers' Index grew to 50.1 from 49.4 in April, which had been the lowest reading since early 2013.

The 50 mark separates manufacturing growth from contraction, with the sector now just on the positive side.

Manufacturing failed to boost overall UK growth during 2015 and early 2016.

UK economic growth slowed to 0.4% in the first quarter of the year from 0.6% in late 2015, propped up by the services sector.

Rob Dobson, senior economist at survey compilers Markit, said: "The manufacturing sector looks likely to act as an increased drag on the economy in the second quarter.

"There are also signs that increased client uncertainty resulting from slower growth and the forthcoming EU referendum are weighing on investment spending and business decision-making in general."

The report found that more than a third of manufacturers surveyed believed uncertainty over the EU vote has had an impact on their business, with 8% saying the effect was "strongly detrimental".

The survey showed the investment goods industry experienced a difficult month, with production falling at the quickest pace since early 2013.