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UK manufacturing output growth eases slightly

Staff Writer |
UK manufacturing activity slowed as expected in May, according to a closely followed survey published on Thursday, but economists disagreed over whether it would be enough to buoy the overall economy.

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The UK manufacturing purchasing managers' index from IHS Markit/CIPS slipped to 56.7 in May from the three-year high of 57.3 the previous month, but above the consensus estimate of 56.5.

With a PMI above 50 indicating growth, the sector seemed to have remained resilient in May, Markit said, with production and new orders both expanding at above-average rates, with good domestic demand and a solid increase in new export business.

Some economists suggested this was more to do with a global upturn than a benefit from sterling's ongoing weakness since the Brexit vote.

The output balance softened to 57.4 in May from 58.2 in April and export orders fell back to 53.5 from 55.6.

Employment rose for the tenth consecutive month, with the rate of jobs growth the fastest since June 2014.

Inflation in input costs and output charges from the weak pound and high raw material prices continued to remain elevated but eased further from recent highs.

Markit reported "signs of a sellers' market developing for some inputs, due to supply shortages and an associated lengthening of vendor lead times".

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