01 October 2007 | Antony Barton
Manufacturing activity in the UK remained strong last month and output prices increased at their fastest rate in at least eight years.
According to the latest CIPS/NTC Purchasing Managers' Index (PMI), where a figure above 50 represents growth, activity in the sector reached 55.1 last month, down slightly from the thirty-seven month high of 56.1 in August.
The volume of new work rose for the twenty-sixth consecutive month, reaching 55.5 from 56.8 in August. The rate of growth in new orders was, however, at its lowest since January.
New business from clients in Asia, Africa, Germany, Ireland and Italy created strong growth in new export orders. But more competition in overseas markets meant the rate of increase dropped to its lowest in 2007 so far, falling to 52.9 from 56.1 in August.
Average output prices rose at their fastest rate since data was first collected in November 1999, rising to 57.8 from 56.0 in August. Companies attributed this to higher purchasing costs on products such as oil, timber, food and paper, and strong demand, which encouraged many to raise their prices.
* Further coverage of PMI reports is available at http://www.supplymanagement.com/pmi