Budgetary pressures among corporate clients, increased economic uncertainty and higher borrowing costs are among the reasons believed to be obstacles to growth. New jobs in the private sector economy grew at the weakest pace since February, S&P Global said in a press release.
In May 2023, UK manufacturing companies experienced a 4-month output decline, with an output index of 53.9. Despite the decline, the sector has seen an expansion of private sector output. Employment rose slightly as business demand picked up, helping to reduce the biggest job backlog since January; input price inflation eased.
Additionally, new orders from abroad were flat in May as improved sales in the services economy were offset by the sharpest decline in manufacturing exports in four months. Commodity producers commented on weak global demand, Brexit-related trade obstacles and increasingly stiff competition to win new orders in overseas markets.
Employment in the private sector increased for the second month since May, although the job creation rate was low and remains significantly weaker than the average seen in 2022. employees reflect growing business requirements, particularly in the service economy, and new hiring efforts amid improved candidate availability. This contributed to the largest amount of work backlog reduction since January. Furthermore, manufacturing companies signaled the fastest decline in work in progress in just over three years in May, thanks to another strong improvement in supplier delivery times.
Input price inflation eased slightly in May, with overall cost pressures showing at its lowest level since March 2021. This was driven by the fastest declines in input costs by manufacturing firms. in just over 7 years.
Commodity producers commented on falling energy bills and raw material prices. However, strong wage inflation meant that the cost burden of service providers rose the fastest in three months. Meanwhile, output fees in the private sector economy rose at a historic rate in May, despite the second-lowest inflation rate since August 2021.
Chris Williamson, chief economist at S&P Global Market Intelligence, The UK economy posted another strong month of growth in May, with continued expansion fueled by increased post-pandemic demand in the services sector, particularly from consumer and financial services, with hospitality operations further boosted by the Coronation. Surveys are consistent with GDP growing 0.4% in the second quarter after growing 0.1% in the first quarter.
“It’s a different story in the manufacturing sector, where spending is being diverted from goods to services, and many companies are also cutting inventories, exacerbating the decline in demand. and push both output and prices lower.”
Fiber2Fashion (NB) News Desk
