The UK’s manufacturing production output rose for the twentieth successive month in November, with solid expansions of output, new orders and employment.
These latest figures, from the CIPS and Markit, suggest the domestic market remained the main pillar supporting the upturn, while the trend in new export orders remained subdued.
The seasonally adjusted Markit/CIPS Purchasing Manager’s Index (PMI) posted 53.5 in November, up slightly from 53.3 in October, a four-month high and a level above the no-change mark of 50.0.
Rob Dobson, Senior Economist at survey compilers Markit, commented: “In the lead-up to the Chancellor’s Autumn Statement, the November PMI survey shows the UK manufacturing sector continuing its solid expansion. Despite easing from the stellar pace set in the first half of the year, growth is still coming from a broad base that will aid its sustainability.”
The survey also found that the rate of job creation recovered to reach a four-month high in November, with the sharpest increases in employment were signalled by SMEs, although large-sized companies also saw a modest gain in headcounts.
Average output charges rose only marginally, suggests the findings, whilst average input prices fell for the third straight month. Companies reported lower prices paid for chemicals, commodities, food raw materials, oil, and plastics. There was also some mention of the exchange rate reducing the price of imported materials.
The trend in new export orders remained weak during November, as exporters faced a combination of subdued global market conditions and a relatively strong sterling-euro exchange rate. New export business decreased for the third consecutive month, with companies reporting lower order inflows from the EU, Russia and emerging markets.
“Apart from the underlying growth picture, a lot of focus remains on the trend in prices. On this score the latest survey suggests that price pressures in manufacturing remain subdued, with input costs falling for the third straight month and output charges rising only negligibly,” continued Dobson. “Recent falls in oil prices should further help reduce manufacturers’ costs. Waning inflationary pressures in industry will continue to provide some leeway for the Bank of England to hold off from raising rates even as solid growth persists.”
David Noble, Group Chief Executive Officer at the Chartered Institute of
Procurement& Supply, added: “The domestic market is this month’s stimulus of growth, supporting continued stability and a good level of confidence.
“Manufacturing appears to be a safe pair of hands and moving in a positive trajectory in the UK economy as we await detail of the Chancellor’s statement this week.”