Assessing UK Manufacturing: PMI Insights & future growth

Andrew Perris, UK Head of FX at Bibby Financial Services, discusses Q3 2023 PMI insights & the manufacturing sector’s 'unwavering resilience'

According to research from S&P Global and CIPS UK Manufacturing PMI, the UK manufacturing sector’s downturn continued at the end of Q3 2023. Output and new orders increased, while demand decreased from domestic and foreign markets. 

 

PMI insights and a glimpse of future manufacturing growth

As fewer orders trickled in, manufacturing output continued to decline across September. Employment also shrunk for the twelfth consecutive month and job losses were registered across the consumer, intermediate and investment goods industries across Small, Medium and Large manufacturers.

Key findings from September 2023 UK Manufacturing PMI, showed:

  • Manufacturing PMI was at 44.3 (compared to 43.0 from August)
  • Output was reduced across all sub-sectors
  • Input prices fall further
  • The supply chain recovery continues
  • September saw the seasonally adjusted UK Manufacturing PMI rise slightly to 44.3, up on August’s 39-month low of 43. A reading below 50 suggests contraction in the sector and we have now been in this territory for 14 months.

Yet the manufacturing industry’s future looks set for positive growth, with 55% of companies expecting to see growth over the next year.

 

UK manufacturing PMI offers relief amid ongoing challenges

Andrew Perris is the UK Head of FX at Bibby Financial Services, the UK’s largest independent invoice finance provider, which assists 7,000 UK SMEs.

“This month’s Manufacturing PMI provides some solace after many consecutive months of decline,” he said. “However, the improvement remains modest, and the sector continues to be challenged. Indeed, new orders continue to fall faster than outputs, and although this downturn has eased slightly on the levels seen in August, it remains steep. Beyond an ongoing reduction in demand, businesses also have to navigate the ever-present challenges related to the cost-of-doing-business crisis - and as the wider international economic backdrop remains weak, manufacturing businesses that trade internationally have the added complication of juggling ever shifting foreign exchange rates. 

“Today’s news is a reflection of the sector's unwavering resilience, but certainly no one in the manufacturing sector will be breathing a sigh of relief just yet. Businesses will need to continue to tread carefully, and to review the best measures to take to manage potential future turbulence.”

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