UK manufacturing expands for seventh consecutive month

Gurjit Degun
1 November 2013

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The UK manufacturing industry carried its strong performance into the final quarter of the year, with improving overseas demand and a rapid increase in exports.


The seasonally-adjusted Markit/CIPS Purchasing Managers’ Index (PMI) slowed marginally to 56.0 in October, compared with 56.3 in September. But the index remained above the 50 baseline, showing an improvement in overall operating conditions for the seventh consecutive month. The rate of expansion was only moderately below the two-and-a-half year high of 57.2 registered in August.


October saw production and new orders rise at rates above their overall averages, leading to further job creation as employment rose for the sixth consecutive month.


The domestic market remained a “prime source” of new contracts, and growth of new export business was down to improving global market conditions.


Total new orders rose at a rate close to August’s 19-year high, as new export business increased at its fastest pace since February 2011. Manufacturing firms reported improved inflows of new work from Asia, the US, mainland Europe, Ireland, the Middle East and Russia. 

Output is growing at a quarterly rate of around 1 per cent to 1.5 per cent. The sharpest increases in new work and output were seen in chemicals and plastics, basic metal products and other manufacturing sectors. 

Purchase price inflation in October eased further from August’s two-year high, “but only to a pace in line with the long-run survey trend,” the Index found. Dairy products, electronics, energy, food, paper, timber, wheat and wood all saw higher prices.


Rob Dobson, senior economist at Markit, said: “Maintaining this solid expansion will be important if we are to see any real signs of the economy rebalancing, as manufacturing remains 9 per cent smaller than its pre-crisis peak, while services have already closed the gap.”


David Noble, CIPS group CEO, added: “British manufacturers swept into Q4 with a steady wind behind them, bolstered by strengthening markets both at home and abroad, as well as output growth across the consumer, investment and intermediate industries. 

“The long-running growth in new orders and the increasing demand for new stock by manufacturers is a big opportunity for suppliers, particularly in meeting the increased demand for raw materials and for lowering the burden on capacity constraints.”

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