By Jonathan Davies
Growth the in the UK's manufacturing industry fell to its slowest pace in 26 months in June, according to a closely watched survey.
The Markit/CIPS manufacturing purchasing managers' index (PMI) fell to 51.4 in June, down from 51.9 in May.
Any figure above 50 indicates growth, which means the manufacturing sector has been growing for 27 consecutive months, but June's figure was the slowest growth in April 2013.
Production for domestic markets continued to grow at a solid place, but subdued demand in Europe impacted on overall growth.
Job creation in the manufacturing sector picked up slightly from May's two-year low, marking the 26th consecutive month of growth.
Rob Dobson, Senior Economist at survey
compilers Markit: “The UK manufacturing sector had a disappointing second quarter overall. Growth trends in output and new orders were the weakest since the opening
quarter of 2013, as a strong sterling exchange rate and subdued demand from mainland Europe offset the continued solidity of the domestic market.
“Export trade is also likely to remain a drag on the economy, given the uncertainty surrounding the Greek debt crisis. This makes it difficult to gauge fully any possible knock-on effects for the UK’s trade with the euro area particularly in relation to impact from the euro-sterling exchange rate.
“UK manufacturing therefore remains dependent on the domestic market, and especially the consumer, continuing to show some strength. On this score, recent signs of a pick-up in wage growth and low inflation may provide some respite to weather the volatility in trade with our European partners."
Mark Stephenson, UK manufacturing industry leader at Deloitte, said: “It is clear from today’s PMI that the situation in the Eurozone is proving increasingly difficult for UK manufacturers. A weak Euro and a possible Greek exit is making for difficult export conditions in the region.
“Yet there remain reasons to be positive. Yesterday’s revised data from the ONS showed better manufacturing output growth in 2014 overall and in the first quarter of 2015.
“The recent Paris Air Show highlighted that there are areas where manufacturing is thriving, with over $100bn of orders placed. This was well over market expectations and the UK aerospace supply chain will benefit significantly.