UK manufacturing activity at three-month high

Paul Snell is managing editor at Supply Management
3 November 2014

Activity in the UK manufacturing sector reached a three-month high in October due to a rise in domestic demand.

According to the Markit/CIPS UK Manufacturing PMI, where a figure above 50 indicates expansion, the sector recorded 53.2 in October, compared with a reading of 51.5 in September.

Although an increase in domestic orders boosted activity, new orders from abroad fell for the second consecutive month. This was attributed to the weak economic performance of the Eurozone, and slower growth in both China and the US.

Employment continued to grow last month, although at the second slowest rate since June. But input prices also fell for the second consecutive month, reflecting falling commodity and oil costs.

“The latest report is a positive marker for the start of the final quarter, as the growth rate of the UK manufacturing sector staged a mini-recovery in October,” said Rob Dobson, senior economist at Markit“Although the pace of expansion remains below that seen at the start of the year, it is positive to see the sector break its recent sequence of slower growth.”

David Noble, group CEO, CIPS, said: “A drop in commodity and oil prices especially has given the sector an advantage in tackling any outstanding orders and improving the pace and delivery of any new work. This in turn contributed to lower output price inflation, which was further influenced by competitive pressures.”

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