Production growth in the manufacturing sector has risen once again in May, as lessened pandemic restrictions and insatiable demand brought the PMI up to 65.5, beating records set in 1994.
Having reached 60.1 in April, this month’s PMI figures only add to a streak of signalled improvement in the last 12 months.
Companies have linked order growth to the reopening of the UK economy as well as rising business confidence.
New export order numbers also broke records this May, as stronger demand from the US, EU and China were experienced. However, while reports of record gains in larger companies were rife, smaller companies made a comparably smaller gain.
Efforts on behalf of manufacturers to minimise the chance of supply-chain disruption led to a record increase of purchase activity during May.
Henry Anson, Managing Director at Hennik Research, publisher of The Manufacturer, said: “The UK manufacturing PMIs reached a record high in May which is further indication that the sector is bouncing back after the disruption of the COVID-19 pandemic. It is fantastic to see order books being filled, jobs being created and productivity booming, it can only have a positive effect of the overall economy.”
Rob Dobson, Director at IHS Markit, said: “The UK PMI surged to an unprecedented high in May, as record growth of new orders and employment supported one of the steepest increases in production volumes in the near 30-year survey history. Growth is being boosted by the unlocking of economies from COVID restrictions and ongoing vaccination programs. This is being felt across the globe, as highlighted by a record rise in new export business during the latest survey month.
“The corollaries of this strong upsurge in industrial activity are increased strain on supply chains and a build-up of price pressures. Supplies of inputs into manufacturers and finished goods on to clients are both being severely disrupted by raw material shortages, port issues, COVID restrictions, post-Brexit difficulties and market forces as demand outstrips supply. Suppliers’ delivery times subsequently lengthened to one of the greatest extents on record, while input costs and selling prices both rose at unprecedented rates. With little sign of supply pressures receding, these price rises will become more visible to consumers.”