Britain’s manufacturing sector eked out modest growth last month after a shock contraction in April, but remained close to stagnation as Brexit concerns hit activity.
The closely-watched Markit/Cips UK manufacturing purchasing managers’ index (PMI) showed a reading of 50.1 in May, up from 49.4 in April, which had marked the first contraction for more than three years. Any reading above 50 signals growth.
The report revealed that more than a third of manufacturers surveyed believe uncertainty over the EU vote has hit their business. Of those, 8 per cent said the impact was “strongly detrimental”.
Economists said Brexit fears are putting off spending and investment decisions, while a slowdown in the global economy has also impacted demand for British goods from abroad.
Howard Archer, chief UK and European economist at IHS Global Insight, said the manufacturing sector was “essentially at a standstill in May”.
Domestic orders rose last month, the PMI indicated.