Home consumption together and exports of consumer goods to the likes of Australia, China, the euro area, Kenya, Mexico, the Middle East, Nigeria, Russia and the US drove the influential Markit/CIPS Purchasing Manager’s Index (PMI) to a 28-month high of 54.6 in July, up from 52.9 in June.
The PMI has remained above the neutral 50.0 mark – signalling expansion – since April, with its level improving in each of the past five months.
Manufacturing production increased for the fourth month running in July, as growth of new orders continued to strengthen. Companies reported improved domestic and export demand.
Manufacturing employment also rose for the third successive month in July, with the rate of job growth reaching a two-year high.
EEF chief economist Lee Hopley enthused: “The good news continues to roll in for UK manufacturing,” adding that “There are now more reasons to be confident that manufacturing will make a more positive contribution to growth through the rest of the year.”
Rob Dobson, senior economist at survey compilers Markit, said the data provided positive news, building on the foundation of the second quarter’s 0.4% return to growth reported by the latest official data. “The breadth of the upturn in manufacturing should aid in its sustainability,” he added.
CIPS CEO David Noble said that although exports had been critical to the success, it was the broad based nature of the sector’s performance which endorsed the view that the sector was on track for solid and accelerated growth in the coming months.
“The ability of British manufacturers to market themselves abroad was always seen as crucial to long-term success and so it has proved,” he continued. The consumer goods industry has led the recovery, however it is perhaps even more encouraging to see increasing output and orders in both the intermediate and investment goods industries as well. As a result, confidence is high, jobs growth climbed to a two-year peak and the relatively subdued nature of inflationary pressures rounds off a very good month for manufacturers.”
This material is protected by copyright Ken Hurst 2013.