April saw UK manufacturing maintain its strong start to 2014 according to CIPS' Purchasing Manager's Index report. The seasonally adjusted PMI soared to a five-month high at 57.3, registering one of its best readings in three years.
The survey also revealed the rate of expansion remains robust, hitting an eight-month high, and growth across the consumer, intermediate and investment goods sectors, with firms responding to rising order inflows, new product launches and efforts to clear work backlogs.
The sector’s performance has resulted in further job creation, with employment increasing for a twelfth consecutive month.
Levels of new overseas business rose for the thirteenth successive month, reflecting stronger inflows from North America, Europe, Asia and the Middle East.
David Richardson, Head of Manufacturing at Lloyds Bank Commercial Banking, Mid Markets, responds to the latest UK Manufacturing PMI:
“Today’s figures reflect the continued revival of British manufacturing – following a minor blip in March’s data – and the boost in confidence for the sector provided by the Chancellor’s pro-manufacturing Budget.
“However, factory bosses must take action to scale up production if they are to capitalise on the opportunities that such a buoyant market will no doubt present.
“With funding in plentiful supply, securing the right skills to man new plant and machinery and mitigating the impact of high input costs will prove to be the greatest challenges that manufacturers will face in the coming months.”
Neil Prothero, Deputy Chief Economist at EEF, the manufacturers’ organisation, said:
“Manufacturing’s upturn is continuing apace with a rebound in productivity, solid job creation and above-average real wage gains across the sector highlighting the vital role being played by industry in the UK’s continuing recovery.
“The domestic market remains the dominant driver of manufacturing activity, although there are some encouraging signs from a rise in export flows that the gradual revival in Eurozone demand is beginning to feed through to manufacturers’ order books.
“We anticipate a gradual strengthening in the global growth picture as the year progresses with manufacturing growth of at least 3% in 2014, the fastest rate of expansion in four years.”