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| UK factories 'booming again', PMI data suggests | UK factories 'booming again', PMI data suggests |
| (17 days later) | |
| Industry's order books and output are growing at their fastest pace in almost two decades as Britain's manufacturing sector emerges strongly from the deep recession of recent years. | Industry's order books and output are growing at their fastest pace in almost two decades as Britain's manufacturing sector emerges strongly from the deep recession of recent years. |
| The monthly snapshot from the Chartered Institute of Purchasing and Supply/Markit said the return of confidence, a rosier outlook for exporters and demand for new products had all helped UK factories in August. | The monthly snapshot from the Chartered Institute of Purchasing and Supply/Markit said the return of confidence, a rosier outlook for exporters and demand for new products had all helped UK factories in August. |
| The purchasing managers index (PMI) rose from 54.8 in July to 57.2 last month – its highest level in two and a half years. | The purchasing managers index (PMI) rose from 54.8 in July to 57.2 last month – its highest level in two and a half years. |
| After struggling during 2012, manufacturing has put on spurt since the spring of 2013, with the PMI above 50 – the cut off level between expansion and contraction – for the past five months. | After struggling during 2012, manufacturing has put on spurt since the spring of 2013, with the PMI above 50 – the cut off level between expansion and contraction – for the past five months. |
| The PMI is made up of various measures of industrial level including orders, output, employment, stock levels and inflationary pressure. CIPS/Markit said orders and output were growing at their fastest pace since the summer of 1994, a period when the UK was recovering from recession. | The PMI is made up of various measures of industrial level including orders, output, employment, stock levels and inflationary pressure. CIPS/Markit said orders and output were growing at their fastest pace since the summer of 1994, a period when the UK was recovering from recession. |
| Strong manufacturing growth has been accompanied by an increase in price pressures, the report said. Companies reported rising costs for fuel and raw materials, with input prices up by 10.4 points on the month – the second highest in the survey's history. | Strong manufacturing growth has been accompanied by an increase in price pressures, the report said. Companies reported rising costs for fuel and raw materials, with input prices up by 10.4 points on the month – the second highest in the survey's history. |
| Rob Dobson, senior economist at survey compilers Markit: | Rob Dobson, senior economist at survey compilers Markit: |
| "The UK's factories are booming again. Orders and output are growing at the fastest rates for almost 20 years, as rising demand from domestic customers is being accompanied by a return to growth of our largest trading partner, the eurozone. | "The UK's factories are booming again. Orders and output are growing at the fastest rates for almost 20 years, as rising demand from domestic customers is being accompanied by a return to growth of our largest trading partner, the eurozone. |
| "The sector therefore continues to build on the solid 0.7% expansion registered during the second quarter, and growth could easily break the 1.0% mark in the third quarter. Manufacturing is clearly making a strong positive contribution to the economy, providing welcome evidence that the long-awaited rebalancing of the economy towards manufacturing and exports is at last starting to take place now that our export markets are recovering". | "The sector therefore continues to build on the solid 0.7% expansion registered during the second quarter, and growth could easily break the 1.0% mark in the third quarter. Manufacturing is clearly making a strong positive contribution to the economy, providing welcome evidence that the long-awaited rebalancing of the economy towards manufacturing and exports is at last starting to take place now that our export markets are recovering". |
| James Knightley, economist at ING, said: "This is the strongest reading since February 2011 and was driven by gains in new orders and production, which both grew at their fastest rate in nearly two decades. Employment was a little softer, but remains in expansion territory, while inflation pressures appear to be building. This report backs up figures from the EEF manufacturers' association which also reported strong output and orders growth overnight." | James Knightley, economist at ING, said: "This is the strongest reading since February 2011 and was driven by gains in new orders and production, which both grew at their fastest rate in nearly two decades. Employment was a little softer, but remains in expansion territory, while inflation pressures appear to be building. This report backs up figures from the EEF manufacturers' association which also reported strong output and orders growth overnight." |
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