Investing.com - Activity in the UK manufacturing sector unexpectedly accelerated last month, according to a closely watched business survey released on Friday.
Research firm IHS Markit said its manufacturing purchasing managers’ index rose to 54.4 in May, compared to forecasts for a reading of 53.5.
The prior month’s reading was 53.9.
Despite the better-than-expected reading, IHS Markit highlighted that the acceleration masked underlying weakness.
“At first glance, the mild acceleration in the rate of output growth and rise in the headline PMI would appear positive outcomes given the backdrop of the slowdown seen in manufacturing since the turn of the year,” IHS Markit director Rob Dobson said.
“However, scratch beneath the surface and the rebound in the PMI from April’s 17-month low is far from convincing,” he warned.
Dobson explained that the slowdown in new order inflows meant that the expansion was only achieved by firms working through their backlogs.
He further noted that weaker than expected sales led to the biggest rise in unsold stock in the survey’s 26-year history.
“Price and supply headwinds, combined with a further slowdown in new order growth, could jeopardize any further expansion of the manufacturing sector,” Dobson concluded.