Latest data released by Markit/CIPS - 2 August 2021
The preliminary report can be found here. No change to the initial estimate as staff shortages and a sharp rise in cost/price pressures (driven by supply chain disruptions) weigh on the growth momentum in the manufacturing sector last month.
The former is driven by self-isolation restrictions, contributing to marked lengthening of supplier lead times and delivery delays. Markit notes that:
"Although July saw UK manufacturers report a further month of solid growth, scarcities of inputs, transport and labour are stifling many businesses.
"On one hand, manufacturers are benefiting from reopening economies. This is leading to solid inflows of new work from both domestic and overseas markets, including the US, the EU, China and the Middle-East.
"On the other, the recent surge in global manufacturing growth has led to another month of near-record supply chain delays, exacerbated by factories and their customers building up safety stocks. Some firms also noted that post-Brexit issues were still a constraint on efforts to rebuild sales and manage supply and distribution channels to the EU.
"Demand outstripping supply is also driving up prices. Input costs again rose at a near survey-record pace, leading to a near-record increase in manufacturers' selling prices. Amid growing indications that many supply chain disruptions and raw material shortages are unlikely to be fully resolved until 2022, the outlook remains one of constrained growth combined with high inflation for the foreseeable future."
