UK manufacturing hits 25-month high

1 July 2013

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1 July 2013 | Adam Leach

The UK manufacturing sector expanded at its fastest rate for more than two years in June as orders flooded in, production increased and better weather helped to raise spirits.

The Markit/CIPS UK Manufacturing Purchasing Managers’ Index reported a growth figure of 52.5 for the month, indicating a marked rise in activity compared with the revised figure for May of 51.5. The rate at which activity increased over the period represents the most pronounced expansion for the sector since May 2011, with orders, new business and customer confidence all increasing.

All manufacturing sub-sectors reported growth in activities, with textiles and food and food and drink experiencing particularly strong expansion. The boost in new orders came off the back of strong demand from both domestic and foreign export markets.

Firms also reported an easing off of pricing pressure as lower chemical, metal and packaging prices resulted in an overall drop in input costs. The favourable conditions, lower input costs and increased production, saw firms increase purchasing activity for the month.

David Noble, CEO at CIPS, said: “Momentum is building in manufacturing as the sector begins to work up a head of steam. The industry experienced another good month to round off a solid Q2. The two-year high in new business growth will do much to reassure firms we are on track for a recovery.”

Rob Dobson, senior economist at Markit, said: “The survey suggests that manufacturing output rose by around 0.5 per cent over the second quarter. Taken with recent signs of service sector strength and a stabilising construction industry, it paints a picture of UK economic growth picking up from the opening quarter’s 0.3 per cent to at least 0.5 per cent.”

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