01 September 2003 | Gareth Mytton
The biggest rise in export orders for more than a year fuelled a second consecutive month of growth in the UK manufacturing industry in August, according to the latest PMI report.
The purchasing managers' index (PMI) - a composite indicator of economic conditions compiled by CIPS and NTC Research - rose to 51.9, up from 51.1 in July and above the 50 figure that indicates no change on the previous month.
A combination of competitive exchange rates, and improving trading conditions in the US, saw the export index rebound into growth at 53.5.
Growth in output was the strongest since May 2002, as August's index reached 55.8. Panel members explained the rise by pointing to rising new orders (53.3) and another drop in input prices (45.3), which they pinned on cheaper polymers and plastics, along with recent falls in sterling.
The fall in output prices was slower than input prices, at 48.9.
Despite the rise in output, stocks of finished goods, stocks of purchases and employment all fell as companies sought to keep costs down. However, quantities of purchases rose.
In the euro-zone, output volumes were unchanged between July and August. Although the PMI was below 50 for the sixth consecutive month, at 49.1, it signalled the weakest deterioration in economic conditions in this period.
New orders, at 50.1, showed marginal growth. They rose in Greece, the Netherlands, Austria, Germany, and, for the first time in six months, France. In Ireland, where conditions in the manufacturing sector have been worsening for nearly a year, the PMI recovered to 48.1.