A survey confirmed that British manufacturers saw another sharp downturn in May but the pace of the slump eased off from April’s record fall as the coronavirus shutdown brought much of the economy to a halt. May’s final IHS Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) came in at 40.7, little changed from a preliminary reading of 40.6 and far below the 50 level above which the index would signal growth. The reading was up from 32.6 in April, suggesting the sector was not declining as fast as before.
The PMI’s output component - which IHS Markit has said previously gives a better picture of the decline - rose to 35 from 16.3. New working practices, doubts about how long coronavirus restrictions would last, weak demand and Brexit worries would slow the recovery, IHS Markit director Rob Dobson said.
“This will make the ‘new normal’ one of the toughest recovery environments many manufacturers will ever have to face,” he added. The rate of decline in employment in manufacturing was the second most severe on record after April’s plunge.
Pockets of growth were mostly linked to healthcare and personal protection equipment, but some firms reported signs of new inflows of business as clients began to reopen and lockdowns around the world were relaxed. Britain’s dominant services sector has been hit even harder by the lockdown restrictions. A final version of the PMI for services firms in the country is due to be published soon.
