A closely watched survey shows that conditions in the UK manufacturing sector have improved significantly, with growth of output, new orders and employment all stronger.
The seasonally adjusted Markit/CIPS Purchasing Managers’ Index (PMI) reached 55.4 in September, up from 53.4 in August, rising to its highest level since June 2014. Any figure above 50 indicates growth.
The rebound in the PMI level since the EU referendum related low in July (Read: "UK manufacturing contracts at its fastest pace for three years") is extremely positive news for the sector, which has seen manufacturing production expand at the quickest pace since May 2014. Growth was led by the consumer goods sector, where output rose at the quickest pace in one and a half years. There were also substantial and accelerated increases at intermediate (11 month high) and investment (eight month high) goods producers.
Commenting on the findings, Rob Dobson, Senior Economist at IHS Markit, which compiles the survey, said: “The weak sterling exchange rate remained the prime growth engine, driving higher new orders from Asia, Europe, the USA and a number of emerging markets. The domestic market is also still supportive of growth, especially for consumer goods. Further step-ups in growth of new business and output in the investment goods sector may also be a sign that capital spending is recovering from its early year lull, in the short term at least."
At Beavis Morgan, our specialist advisers to the manufacturing sector are able to assist with business growth and optimisation. Our Research & Development (R&D) tax credits team have also made a significant number of successful claims on behalf of clients in the manufacturing sector. Contact Steve Govey or your usual Beavis Morgan Partner for further information about how we can assist you and your manufacturing business.