Manufacturers end 2003 on a high

22 January 2004
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22 January 2004 | David Arminas

Britain's manufacturing sector finished last year with the biggest monthly growth in four years, even though new orders grew more slowly.

The purchasing managers' index (PMI), an economic indicator compiled by CIPS and NTC Research, rose from 54.7 in November to 56 in December. A figure above 50 indicates growth on the previous month.

New orders continued to rise, but they grew slightly more slowly than in November, which saw the highest monthly increase since December 1999. The main source of new exports was the US.

Roy Ayliffe, director of professional practice at CIPS, expects manufacturing growth to remain in the mid-50s throughout 2004.

"The poor performance of manufacturing at the start of 2003 was due to a slump in the telecoms and IT sector," he said.

"But this is picking up, especially as sales of third-generation mobile phones kick in."

He added that an interest rate rise later this year would be likely to dampen manufacturing growth.

However, November figures from National Statistics revealed an unexpected drop in manufacturing output. It fell by 0.7 per cent on the month from a 0.9 per cent gain in October, possibly reviving earlier fears that the recovery would be short-lived.

Growth for the UK's private services and construction sectors finished the year in December down slightly from November, but still on a strong note.

Their respective headline indices stood at 58.5 and 59.2.


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