The employment subindex rose to 55.5 in June, the highest level since September 2014, from 54.6 in May. Despite weaker output growth and only a slight acceleration in total new business gains, the latest survey highlighted the fastest increase in payroll numbers since September 2014. Manufacturer noted that ongoing company expansion plans and the launch of new products had acted as a driver of staff recruitment at their plants. Meanwhile, backlogs of work continued to accumulate in June. In some instances, survey respondents noted that difficulties in recruiting suitably skilled staff had contributed to rising volumes of work outstanding.
The output subinded slowed to 53.9, the lowest level since January 2014, from 55.2 in May. Reports from survey respondents suggested that subdued export sales and weaker investment spending patterns in the energy sector had weighed on output growth. Overall volumes of new work increased at a slightly faster pace than the 16-month low seen in May. Manufacturers commented on solid demand from domestic clients and gradually improving economic conditions. Meanwhile, new export orders dropped for the third successive month, which is the longest continuous period since the second half of 2012. Lower demand from abroad was linked to the strong dollar, subdued sales to clients in the euro area and intense competition for new work.