Manufacturing activity continues to grow

1 December 2009

1 December 2009 | Rebecca Ellinor

Activity in the UK manufacturing industry continued to swell last month, although at a slightly slower rate than in October.

According to the latest CIPS/Markit Manufacturing Purchasing Managers’ Index (PMI) – where a figure above 50 represents growth – total activity in the sector registered 51.8 in November. This is down slightly from a revised figure of 53.4 in October.

The PMI has registered a reading above the neutral mark of 50.0 in four out of the past five months.

Output prices increased for first time in 10 months from 49.8 in October to 51.4 in November. Growth of production and new orders continued and employment fell at the slowest pace for one-and-a-half years.

David Noble, CIPS CEO, said: “The manufacturing sector has slowly but surely started to grow again and conditions are looking decidedly less sickly than at the start of the year.

“However, the extent to which output fell during the recession means that the growth is coming from a particularly low base and there is a long way to go before we can say the sector has returned to full health.”
 
He cautioned, however, that with new orders expanding at a slower rate than in October, there are already signs that the rebound in growth may be nearing its peak, “leaving question marks over the longer-term outlook and the possibility of a double-dip recession”.

On a positive note, Noble noted that export demand grew at its fastest rate in almost two years “as improving market conditions and the ongoing weakness of sterling bolstered demand from Europe, US and Asia”.

Further coverage of PMI reports is available here

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