Markit/CIPS UK Manufacturing PMI®
- UK Manufacturing PMI at 52.7 in November
- Output and new orders expand at slower rates
- Factory gate selling prices and input costs both fall further
The UK manufacturing sector maintained its positive start to the final quarter, with November seeing growth ease only moderately from the recent peak attained in the prior survey month. However, the expansion remained firmly centred on large companies, as the trend at SMEs stayed lacklustre in comparison.
The seasonally adjusted Markit/CIPS Purchasing Manager’s Index® (PMI®) posted 52.7 in November, down from October’s 16-month high of 55.2 (originally reported as 55.5). The headline PMI has remained above the neutral 50.0 mark in each month since March 2013.
Manufacturing production expanded for the thirty-second successive month in November,underpinned by rising levels of incoming new business. Although the rates of growth signalled were weaker than in the prior survey month, they remained above the respective long-run series averages.
By sector, the strongest expansion in output was seen at consumer goods producers. Solid growth was also registered in the investment goods sector. Although the upturn continued at intermediate goods producers, the sector experienced a sharp growth slowdown in November.
Price pressures remained on the downside, with average input costs and factory gate selling prices both falling during the latest survey month.
The decrease in purchasing costs was especially marked, with the rate of deflation remaining among the fastest seen in the near 24-year series history. Lower input costs were generally linked to falling global commodity prices. Output charges were reduced for the third successive month, as companies maintained their competitiveness by passing on (in part) the decrease in costs.
November saw little change in staffing levels, as the trend in employment moved back close to stagnation following the solid job creation signalled during October. An increase in workforce numbers was recorded in the consumer goods sector, while modest cuts were signalled at both intermediate and investment goods producers.
The trend in new export business at UK manufacturers continued to improve in November, as inflows of new work from overseas clients rose for the third straight month. Companies reported improved intakes of new business from clients based in the USA, Germany, Sweden, Turkey, the Middle-East, Japan, China and also from other Asia-Pacific nations.
David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply:
“Market forces continued to be strong, although at a softer and less robust pace than last month, as purchasing activity continued along its upward trend.
“Buoyed up by continued falls in commodity prices and a steady rise in new export orders and improved domestic demand, once again larger companies took advantage of these ripe conditions following last month’s trend.
“Staffing levels failed to follow however, and levelled off to near-stagnation territory providing little to celebrate and cause for concern around the sustainability of growth.
“Extra marketing efforts and a reduction in stock levels meant many companies were gearing up to free cash flow and meet higher business demand though vendors continued to struggle and have remained under pressure now for a full two and a half years.”
The December 2015 Report on Manufacturing will be published on: Monday January 4th 2016 at 09:30 (UTC)
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