UK manufacturing hits a 28-month high in July
The upturn in UK manufacturing continued to build momentum at the start of the third quarter, with growth rates for production and new orders at their highest levels since February 2011, according to the latest Markit/CIPS Purchasing Manager’s Index (PMI).
The index rose to a 28-month high of 54.6 in July, up from 52.9 in June. The PMI has remained above the neutral 50.0 mark – signalling expansion – since April, with its level improving in each of the past five months.
Although the domestic market remained the prime source of new contract wins, manufacturers also reported a solid improvement in overseas demand.
“The much vaunted march of the makers has finally materialised with the UK manufacturing sector’s output growth hitting a 29-month high in July,” reports David Noble, CEO of the Chartered Institute of Purchasing & Supply. “Exports have been critical to this success, but it is the broad-based nature of the sector’s performance which endorses the view we are on track for solid and accelerated growth in the coming months.
“New export business has grown at its quickest rate in two years in a sign that macro-economic conditions are improving,” he adds. “Domestic performance has also been strong.”
Manufacturing production increased for the fourth month running in July, as the growth of new orders continued to build. Companies reported improved domestic and export demand, with new export business rising at its fastest pace for two years.
Manufacturing employment rose for the third successive month in July, with the rate of job growth reaching a two-year high.
“The breadth of the upturn in manufacturing should aid in its sustainability,” comments Rob Dobson, senior economist at the survey compiler, Markit. “The performance of the domestic market, which was the prime source of new contracts, is a real positive. But let’s not forget that there is also a strong export component in these positive numbers, as UK manufacturers benefitted from the sharpest growth in new export orders for two years as key markets such as the Euro-zone moved closer to stabilising.”
