Manufacturing continues to grow amid rising domestic demand despite weak exports

The UK's manufacturing sector grew again in June

The UK's manufacturing sector has seen growth for the second month in a row, despite rising cost inflation and weak exports, according to fresh data.

Manufacturing activity expanded last month due to an increase in new orders, although there was a slight deceleration compared to the previous month. The S&P Global/CIPS UK manufacturing PMI survey recorded a score of 50.9 for June, a slight drop from May's 22-month high of 51.2.

A score above 50 indicates growth in the sector, while a score below this signifies contraction. The survey revealed that production volumes increased as firms saw "rising intakes of new orders and ongoing efforts to clear backlogs of work".

Growth was particularly noticeable in the consumer, intermediate and investment goods sectors. The surge was fuelled by strong levels of new domestic work, which compensated for a decline in new overseas work for the 29th consecutive month.

Rob Dobson, director at S&P Global Market Intelligence, commented: "The UK manufacturing sector is enjoying its strongest spell of growth for over two years, with June seeing output and new order growth sustained at robust rates similar to May's recent highs."

"The performance of the domestic market remains a real positive, providing a ripe source of new contract wins. In contrast, the ongoing weak export performance is concerning, with manufacturers reporting difficulties in securing new business in several key markets including the US, China and mainland Europe."

Meanwhile, firms reported that input cost inflation rose at the fastest pace since January 2023. Purchase prices rose for the sixth successive month, with increases in energy, food, metals and packaging costs.