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UK manufacturing defies expectations to hit four-month high

UK manufacturing defies expectations to hit four-month high

LONDON: British manufacturing exceeded expectations last month as growth accelerated to hit a four-month high, according to a closely watched survey. IHS Markit’s UK manufacturing purchasing managers’ index (PMI) jumped to 56.9 last month, higher than the 55 that had been expected and above the 55.1 reported in July. Any number above 50 suggests growth in the sector’s output.

The survey found “broad-based expansion” across all products, and production rose at the steepest pace in seven months, underpinned by more work received. While the trend in new export business remained “robust”, most of the new work was won domestically. “Although the rate of improvement in foreign demand eased from July’s near-record high, it remained among the strongest seen since new export orders data were first collected in January 1996,” IHS Markit found. A stronger manufacturing sector also led to more jobs, with the rate of increase in employment the fastest since June 2014. Rob Dobson, director at IHS Markit, said: “The UK manufacturing sector continued to show signs of solid progress during the third quarter, with rates of expansion in output, new orders and employment all gathering pace in August. The key question is whether this positive start to the second half of the year can be sustained.” He added that business confidence had risen to one of its highest levels in over a year, although warned that shortages of staff and raw materials could curtail growth in the short term. Separate manufacturing data for the eurozone showed that Austria, the Netherlands and Germany led the expansion of business last month.