UK factory slowdown eases further despite weak conditions
The S&P Global UK manufacturing PMI survey, watched closely by economists, showed a reading of 48.0 in July, compared with 47.7 in June.
Any reading above 50 indicates that activity is growing, while any score below means it is contracting.
It was marginally worse than expected, with economists having predicted a reading of 48.2.
Rob Dobson, director at S&P Global Market Intelligence, said: 'The UK manufacturing sector is starting to send some tentatively encouraging signals, with the downturn moderating in July as factory output came close to stabilising and future output expectations hit the highest since February.
'However, it's clear that there's no assured path back to strong growth.
'Clients in the home market often remain unwilling to spend due to cost factors such as higher minimum wages and employer NICs, while export markets are being buffeted by geopolitical stresses and trade and tariff uncertainties.'
The manufacturing sector saw activity contract for the ninth consecutive month despite the slowdown in decline.
Surveyed businesses said market conditions remained 'subdued' in July as new business fell at a faster pace than during June.
UK manufacturers highlighted that willingness to spend was weak domestically and overseas due to concerns over economic uncertainty and higher labour costs.
New export orders declined again as firms highlighted the continued impact of US tariffs.
Weak demand and rising staff costs contributed to another fall in employment during the month, marking the ninth consecutive month of falling employment.
Dave Atkinson, UK head of manufacturing at Lloyds, said: 'UK manufacturers continue to face into fast-changing global trade conditions and continued cost pressures.
'Despite this, businesses remain more optimistic about the drive for sustainable growth and plans to accelerate infrastructure projects through the Industrial Strategy.
'They remain focused on building momentum and making sure they're ready to capitalise on emerging opportunities as conditions evolve.'
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