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Why Did UK Manufacturing Growth Decline?


Jon Steeler

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Guest Sam Bouman

The latest manufacturing PMI numbers to come out of the UK showed that the Brexit stockpiling boom of early this year gave way to the steepest downturn in the UK manufacturing sector in nearly three years as new orders seemed to fade.

In April the UK manufacturing PMI stood at 53.1 where as for May the number came in at 49.4, this is the lowest level we have seen sinceJuly 2016.

Some of the reasons for this were that export orders dropped a fairly rapid rate, this could be attributed to the global trade tensions and trade wars and Brexit as businesses are moving their supply chains away from the UK because of the uncertainty and potential tariffs in the future.

With the UK’s departure from the EU pencilled in for the 31st of October the rush to stockpile goods has faded away which has weighed heavily on the manufacturing sector with new order flows declining both domestically and from abroad.

While this downturn may continue for the short term the longer term outlook sees manufacturers striking a more positive tone with expectations that Brexit uncertainty will subside and global trade war fears will ease. 

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It’s too early to predict if the situation will normalize, I find it more likely that the manufacturing will go down. The rest of the EU will probably take their business elsewhere, since the UK manufacturing industry will probably increase their cost of production in order to cover the difference in profit. Automation is also something that should be considered at this point since it will decrease the upkeep costs of operating a factory and potentially increase profits. That’s why I think that places like [url=https://www.automationstop.com/buy-allen-bradley][/url]will always stay in business.

Edited by Alexander Vaughan
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