UK Manufacturing Accelerates In Aug; Supply Problems Mount

--UK Aug manufacturing PMI 56.9 versus 55.3 in July

By David Robinson

     LONDON (MNI) - UK manufacturing sector activity accelerated in August while

supply-side pressures increased, the IHS Markit/Purchasing Managers' Index (PMI)

showed.

     The headline manufacturing PMI rose to 56.9 in August from 55.3 in July, a

four month high and the second highest reading in over three years. On the

supply side, input price inflation picked-up and there were reports of staff

shortages, suggesting rising inflation ahead and constraints on future output.

     The report recorded the first acceleration in purchase price inflation in

seven months, although it was less marked than at the turn of the year. Sterling

weakness appears to be both bolstering export orders and pushing up in input

costs.

     "There are increasing signs of supply-side issues leading to raw material

and staff shortages, which could become a constraint on output growth going

forward, while also leading to higher costs,"  Rob Dobson, Director at IHS

Markit, said.

     The output measures in the survey all pointed to robust activity in coming

months. The output, new orders and employment measures were all higher in August

compared to July, with production seeing the steepest increase in seven months.

     UK services growth has been subdued and construction activity soft, leaving

manufacturing as the bright spot in the economy.

     In August manufacturing domestic order growth outstripped export growth,

although the latter was still strong by historic standards.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

[TOPICS: M$B$$$,M$E$$$,M$$BE$]