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Highlights:
- Growth in manufacturing output eased in the quarter to July amid inflationary pressures.
- The sector witnessed the slowest growth rate in a year during the period.
Inflationary pressures, as well as the disruption in supply chains due to the Russia-Ukraine conflict, have impacted the UK's manufacturing sector. In the quarter to July, industrial output grew at the slowest pace in over a year, despite a slight pickup in investment.
The Industrial Trends Survey, a quarterly survey by the Confederation of British Industry (CBI), showed that the output balance fell to +6% in July, from +25% in the three months to June. This is the lowest growth since April 2021 but still above the long-term average growth of +2. A similar rate is expected in the quarter to October, CBI said. The survey is based on responses from 237 manufacturing firms.
The latest figures indicated a more typical expansion rate after a period of solid growth over the previous year.
The average costs during the period also saw a slower growth rate of +82%, compared to the previous quarter's rate of +87%. This growth is expected to further slow down to +77% in October. Besides, domestic price growth also eased from +60% in April to +51% in July.
On the other hand, investment in the sector picked up in July compared to April, while employment registered a slight fall to touch +18% from +21% in April.
In the wake of this news, here's a look at three London-listed manufacturing stocks.
Anglo American plc (LON: AAL)
Anglo American is a leading British miner engaged in the production of platinum, diamonds, copper, iron ore, and other metals. With a market cap of £35,653.14 million, shares of the company were trading at GBX 2,719.00, up 2.01% as of 12:57 pm GMT+1 on Monday. The share value has declined by 8.15% over the past 12 months and by 9.62% on a year-to-date basis. Its earnings per share are currently at 6.93.
Premier Foods Plc (LON: PFD)
The British food manufacturer has popular brands like Cadbury and Mr Kipling under its portfolio. It has acquired Indian and Thai recipe kit maker The Spice Tailor in a £43.8 million deal. The FTSE 250 constituent has a market cap of £975.40 million, and it has given a return of 6.36% to investors over the past year. The earnings per share currently stand at 0.13, and the shares were trading 3.54% up at GBX 117.00 as of 1:06 pm on 25 July.
Croda International (LON: CRDA)
Croda international manufactures speciality chemicals and is listed on the FTSE 100 index. The stock has slipped by 12.37% over the past 12 months, while the year-to-date return is at -31.20%. Shares of the company were trading at GBX 6,946.00, down 1.48% as of 1:09 pm on Monday, with a market cap of £9,844.30 million.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
