LONDON (ShareCast) - UK's industrial base continued to contract in May, but at the slowest pace for a year, pointing to a possible recovery towards the end of 2009.
CIPS' Purchasing Managers' Index rose to 45.4 in May from 43.1.
A figure below 50 indicates contraction in new orders and order, but the trend is encouraging said the producers of the survey. It was the third consecutive month of improvement in the index.
"Although the index remains below levels consistent with outright recovery, this is a further sign that the downturn in UK manufacturing is easing," said Rob Dobson of Markit, which produces the index along with the Chartered Institute of purchase and Supply.
A study by the Engineering Employers Federation also suggested that manufacturing growth could return by the end of 2009, though it also raised its job loss forecast for the year by 40,000 to 188,000.
"Members say there has been a pick up in new enquiries and there are hopes this will be translated into firm orders," said EEF head of economic policy Lee Hopley.
The EEF's business trends survey showed a sharp deterioration in output over the past three months, but it said its members had indicated that destocking may be coming to an end.
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