By Brian Snelson [CC BY 2.0], via Wikimedia Commons
In November, the manufacturing sector of the United Kingdom shifted up a gear as a closely-watched index revealed that the sector was at a four-year high.
The purchasing managers’ index (PMI) of IHS Markit for the manufacturing sector rose to 58.2 from an upwardly improved 56.5 in October, topping the expectations of economists and scoring its highest level since August 2013.
The index registered strong growth in the output of sector – any figure that is more than 50 indicated growth – however, the pound dropped 0.5 percent against the US dollar in late morning trading because of profit taking.
The director at IHS Markit, Rob Dobson, stated: “UK manufacturing shifted up a gear in November, with growth of output, new orders and employment all gathering pace. On its current course, manufacturing production is rising at a quarterly rate approaching 2 percent, providing a real boost to the pace of broader economic expansion.”
The survey said that manufacturing production developed at the fastest pace since September of last year and to one of the greatest degrees during the last four years. Companies associated this with substantial inflows of new orders, indicating solid domestic demand and steeper gains in new export business.
The managing director at UFX.com, Dennis de Jong, said that manufacturing output had been one of the several bright spots for the British economy since the Brexit referendum. However, he pointed out that it fainted in comparison to manufacturing in the Eurozone, which was developing at its fastest rate in seventeen years.
de Jong stated: “Still, British economists need all the positives they can get, and with ‘sufficient progress’ in Brexit talks helping to boost the pound in recent days, traders will hope the continued improvement can give the beleaguered market some much-needed momentum.”
The chief UK economist at Pantheon Macroeconomics, Samuel Tombs, said: “UK manufacturers are being swept along by the Eurozone’s resurgence—the single currency area’s PMI increased to 60.1, from 58.5 in October—but remain cautious about the outlook.
“Manufacturers remain very cautious about the outlook and likely won’t invest enough to enable the current period of strong output growth to continue for long.”