Manufacturing recovery on track as jobs prospects climb

CIPSnoble300The UK manufacturing sector ended 2013 in positive territory with growth in orders and the production to match them continuing at their highest levels for more than two decades.

The Markit/CIPS Purchasing Manager’s Index (PMI), a respected bellwether of the sector’s wellbeing, posted 57.3 in December, down slightly from November’s 33-month high of 58.1, “but still a level indicative of a robust improvement in overall operating conditions” and well ahead of its ‘neutral’ 50.0 mark.

December saw rates of expansion in production and new orders both remain among the highest in the 22-year survey history, leading to a pace of job creation close to November’s two-and-a-half year record. Companies benefited from strengthening domestic market conditions and a solid bounce in incoming new export orders.

The level of new export business increased for the ninth consecutive month in December. However, the rate of growth eased to the weakest since September. UK manufacturers reported improved demand from Brazil, China, Ireland, Russia and the USA.

December data signalled an eighth successive monthly increase in manufacturing employment. The rate of jobs growth was the second-strongest in the past two-and-a-half years.

Rob Dobson, Senior Economist at survey compilers Markit, said, “On its current track, the sector should achieve output growth of over 1% in the final quarter while filling around 10-15 thousand jobs, continuing its positive contributions to both the broader economic and labour market recoveries.

“With the manufacturing sector still some 9% off its pre-crisis peak production, the question everyone wants answering is whether this upturn can develop into a self-sustaining recovery.

“Output and new orders are rising across all manufacturing sub-sectors and also at SMEs and large-scale producers.

CIPS CEO David Noble (pictured) said manufacturing had “all signs of powering ahead into 2014”, adding, “The only area of concern is the cost inflationary pressure which continued to build up during this final month, with input price inflation hitting a 28-month high.”

EEF chief economist Lee Hopley agreed that the data “provided a springboard for growth going into 2014”. She went on, “Surer signs of a manufacturing recovery in Europe together with steady growth both at home, in the US and emerging markets should align to support solid expansion of UK manufacturing in the year ahead. However, while we can hope to see more of the ground lost during the recession made up this year, we must also start to see new investments coming on stream if the sector is to secure a sustainable, long-term recovery.”

Copyright Ken Hurst 2014

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About Ken Hurst

Ken Hurst began his career as a journalist in London over 30 years ago, working on a range of publications before moving on to weekly newspaper production in the newly-independent Zambia of the 1970s. He returned to the UK where his work included spells on newspapers and magazines, before moving to head up Norwich Union’s corporate affairs division. In the 1990s he moved on to freelance, co-own and publish the B2B audio magazine Sound and front the BBC radio Yesterday’s Papers programme. There followed six years as Business Editor at Britain’s biggest selling regional daily newspaper, The Eastern Daily Press, where he led an award-winning team and for whom he still writes a weekly socio/political comment column. Subsequently, he was Group Editorial Director at CBM, responsible for its UK and US magazine output – including The Manufacturer magazine – research-driven industry reports and live events content. Currently he is Contributing Editor at Works Management magazine publisher Findlay Media and Chairman of the consumer publishing house TNT Multimedia Ltd. He is a Fellow of the Royal Society of Arts and of the British Association of Communicators in Business.
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