1 November 2010 | Angeline Albert
Growth of UK manufacturing production accelerated steeply in October, according to the Markit/CIPS Purchasing Managers’ Index (PMI).
The index came in at 54.9 for October, up from September’s 10-month low of 53.5. A score of 50 represents no change.
Output rose in response to increased order intake and a solid rise in new export orders. Meanwhile, supply-side constraints and expected future input price rises led to an increase in raw material stocks.
Rob Dobson, senior economist at Markit said: “An improvement in the UK Manufacturing PMI for the first time since May’s 15-year high will provide reassurance that manufacturing remained a driver of UK economic growth at the start of the final quarter.
“Looking ahead, business confidence, private investment spending and exports will be important to sustaining the recovery as growth derived from the public sector and consumers is hit by austerity measures and rising job insecurity. To this end, the October rebound in investment goods production and a sharp increase in manufacturing job creation provide early positive portents."
CIPS CEO David Noble said: “New orders are providing manufacturing purchasers with a mandate to increase activity and hire new staff, but inevitably, there will be hard graft ahead as pressure on supply chains remains a big concern. The increased buying activity happening now is calculated to replace depleted stock and avoid expected input price increases, which are already passed on to customers.”