UK Manufacturing PMI Slips from Four-Year High on Fading Stockpiling

The UK's manufacturing sector lost some momentum in June. The PMI slipped from a four-year high, though it remained firmly in expansion territory. The S&P Global UK Manufacturing PMI fell to 52.5 from 53.9 in May, below the flash estimate of 53.1. Factory output continued to grow at its fastest pace since September 2024, the survey showed. For context on how such data moves the pound, see the GBP/USD profile.

The slowdown reflected a fading boost from stockpiling. Customers had been building inventories to guard against supply-chain disruptions and price increases. “A drop in the rate of growth of new work intakes suggests this boost is already starting to fade,” Rob Dobson, director at S&P Global Market Intelligence, said in a statement. Business optimism stayed subdued, with firms citing geopolitical tensions and uncertainty over government policy.

Inflation pressures were mixed. Input cost inflation remained elevated because of raw material shortages and higher supplier charges. A decline in energy prices helped slow the overall pace of cost increases, allowing factory gate prices to moderate as well. The survey indicated that manufacturers still benefit from temporary inventory-related demand. Sustaining the recovery will depend on a stronger pipeline of underlying orders as those stockpiling effects diminish, S&P Global said.