UK manufacturing has continued its recent surge, with growth across output, new orders and employment, according to the latest Markit/CIPS Purchasing Managers’ Index (PMI).
With a PMI score of 55.4 for September, UK manufacturing has reached a level last seen two years ago in June 2014.
According to Markit/CIPS, the domestic market remained a prime driver of new business wins, coupled by the reduced sterling exchange rate driving up new orders from abroad.
UK firms reported improved demand from Asia, Europe, the US and a number of emerging markets.
The announcement stated: “The rebound in the PMI level since its EU referendum-related low in July has been sufficient to make the third quarter average (52.3) the best during the year-to-date.”
Growth was reportedly led by the consumer goods sector, with output rising at its quickest pace for 18 months. Employment rose for the second consecutive month, following a decline during the first quarter of 2016.
Senior economist at IHS Markit, Rob Dobson said: “The rebound over the past two months has been encouragingly strong, and puts the sector on course to provide a further positive contribution to GDP in the third quarter.”
Chief economist at EEF, Lee Hopley noted: “Today’s expectation–busting surge in manufacturing activity points to conditions across industry being considerably better than business as usual, with expansion in output and new orders in all industry segments boding well for growth in the second half of this year.
“The UK is not alone in seeing positive manufacturing indicators this month with solid gains in the Eurozone suggesting there is some momentum building behind the manufacturing recovery in developed economies.
“While UK exporters have the added boost from the weaker exchange rate, it’s the prospect of brighter demand prospects that provides confidence that growth will hold up.”
Head of Manufacturing at Lloyds Bank Commercial Banking, Dave Atkinson commented: “British manufacturers have used their agility and experience to build momentum during a period of uncertainty, growing their order books in a time when others have put expansion plans on hold.
“The industry has recognised that the export benefits of a weakened pound will not last forever, and manufacturers are actively exploring new market opportunities for British products both at home and overseas.
“Delivering sustainable growth with new trade partners has taken on increasing significance in what is an evolving economic landscape, and supporting first-time exporters during this process will be fundamental to the success of the country’s export operations.”
Head of Manufacturing at Barclays, Mike Rigby said: “Manufacturers continue to show their grit following the Brexit vote with today’s figures reporting increasing output and a healthy flow of new orders for September.
“Moreover, exporters continue to step up activity to make the most of the weak pound although the flip side of that coin is that rising input costs will have to be absorbed somewhere. We can now expect the sector to be looking increasingly towards November’s Autumn Statement to see how the government proposes to bolster industry and the UK economy.”