Manufacturing remains high in May

Manufacturing was stable in May, being unchanged from the figure recorded in April, which was the highest for 15 years.

According to the latest Markit/Chartered Institute of Purchasing and Supply survey manufacturing PMI was 58.0, a little more than the 57.8 expected by analysts.

Any figure above 50 indicates manufacturing growth, while a figure below 50 shows a contraction in manufacturing. The figure has been above the 50 mark since July of last year.

Manufacturing output increased for the 12<sup>th month in a row, although the rate of growth slowed again for the second month in a row.

Export orders increased for the ninth month in a row thanks to the weakness of the pound, while overall new orders continued to grow at a similar rate to that recorded in April.

However the survey also found that average purchasing prices increased in May at the fastest rate since August 2008. Factory gate inflation was also grew at the fastest rate since September 2008.

"The composite PMI came in at 58 in May, unchanged on the month, signalling further robust expansion in the manufacturing sector." said Ross Walker, RBS Economist.

"The key survey balances (output, new orders and employment) all eased a touch on the month. Offsetting that was a very large change in the most obscure series in the composite – the balance capturing the delivery times of suppliers – which hit a record 'high' in May."

"Nonetheless, the levels of the key survey balances – which are what matters – are still well into expansion territory. The near-term prospects remain strong."