02 August 2004 | Gareth Mytton
The growth in UK manufacturing activity accelerated in July, according to the latest purchasing managers' index (PMI) figures.
The PMI - a composite indicator of economic activity from CIPS and NTC Research, where 50 means no change on the previous month - rose to 56.3, up from a revised level of 55 in June.
Supply chain bottlenecks were the main cause of higher input prices, at 65.2, with purchasers naming steel as a particular problem. Rising oil prices also fuelled higher plastics and polymer costs.
Quantities and stocks of purchases both rose, the latter for the first time this year. Purchasers increased their activity to pre-empt further price rises and material shortages. Suppliers' delivery times lengthened.
Output, at 59.5, was buoyant, as companies took on new business and worked to deliver goods on time. They took on more staff and cut backlogs of work.
New orders (58.1) and new export orders (54.2) grew more quickly, with orders picking up across US, European, Middle Eastern and Asia-Pacific markets.
The euro-zone PMI rose to 54.7 in July, up from 54.4 in June, as output and new orders both grew. They rose in all countries apart from France and Greece.
In the US, manufacturers are enjoying the longest period of growth for more than 30 years. The Institute for Supply Management (ISM) put the July PMI at 62.
"This is the longest period of growth above 60 since the 12-month period of July 1972 through July 1973," said Norbert Ore, chair of the ISM manufacturing business survey committee.
* More information on the UK and euro-zone PMIs is available at www.ntc-research.com
. The full text of the ISM reports on the US economy for May, and previous reports, is available at http://www.ism.ws/ISMReport/index.cfm.