At 56.0 in October, marginally down from a revised reading of 56.3 in September, the industry bellwether Markit/CIPS Purchasing Manager’s Index (PMI) signalled an improvement in overall operating conditions for the seventh straight month, maintaining a rate of expansion only moderately below the two-and-a-half year high registered in August.
October saw production and new orders both rise at rates above their long-run averages, leading to further job creation.
Total new orders also rose at a rate close to August’s 19-year peak, as new export business increased at the quickest clip since February 2011. Companies reported improved inflows of new work from Asia, the USA, mainland Europe, Ireland, the Middle-East and Russia.
Manufacturing employment rose for the sixth consecutive month in October, although the rate of jobs growth eased from September’s 27-month peak.
Rob Dobson, senior economist at survey compilers Markit said that despite only accounting for less than 11% of the economy, the current strength of manufacturing growth seen in manufacturing meant the sector would still provide a major boost to the economy.
CIPS CEO David Noble (pictured) said that British manufacturers had “swept into Q4 with a steady wind behind them” and the expansion in production and sales volumes in October “keeps hopes alive that there will be a solid end to the year”.
EEF chief economist Lee Hopley believed the index pointed to “a solid expansion in activity across the sector”. She continued: “Particularly encouraging is the strong showing in export demand. Manufacturers’ focus on developing new products and services to support their expansion into new export markets is making a strong contribution to this trend.”
EEF is forecasting growth to bounce back to over 2% next year.
This material is protected by copyright Ken Hurst 2013.