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UK manufacturers create up to 15,000 jobs in Q4 2013

02 January, 2014

Output from UK manufacturers grew by more than 1% during the final quarter of 2013, with the sector creating around 10–15 thousand jobs, according to indications from the latest Purchasing Managers’ Index (PMI). Rates of expansion in production and new orders during December were among the highest in the survey’s 22-year history, although the PMI of 57.3 was slightly down on November’s 33-month high of 58.1.

“The domestic market remains resurgent and is a major factor driving production and new order inflows higher,” says Rob Dobson, senior economist at survey compiler, Markit. “UK exporters are also finding pockets of strength, with sales of capital and intermediate goods rising solidly to destinations such as Brazil, China, Ireland, Russia and the USA.

“With the manufacturing sector still some 9% off its pre-crisis peak production, the question everyone wants answering is whether this upturn can develop into a self-sustaining recovery,” he adds. “The news is still good on this score, as growth is coming from a broad base that should help keep the rebound on track during the early stages of 2014. Output and new orders are rising across all manufacturing sub-sectors and also at SMEs and large-scale producers.”

According to David Noble, CEO at the Chartered Institute of Purchasing & Supply, all the signs are that UK manufacturing will power ahead into 2014. “The rate of production and new order growth [in December] remained well above the long-run survey average, rounding off the best overall quarterly performance for the PMI since Q1 2011,” he reports. “The sector’s broad-based expansion was underpinned by strong domestic demand and improved export orders, all of which are signs of an underlying trend of continuing growth going into the New Year.

Noble’s only area of concern is that cost-inflationary pressures continued to build during December, with input price inflation hitting a 21-month high.

Commenting on the PMI survey, Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said that the December figures provided “a springboard for growth going into 2014”.

“Surer signs of a manufacturing recovery in Europe, together with steady growth both at home, in the US and emerging markets should align to support solid expansion of UK manufacturing in the year ahead,” Hopley noted. “However, while we can hope to see more of the ground lost during the recession made up this year, we must also start to see new investments coming on stream if the sector is to secure a sustainable, long-term recovery.”

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