UK’s manufacturing continues to recover
BRITAIN’S factory output shifted up a gear last month amid signs that a weaker pound is boosting demand from overseas customers.
Manufacturing in June grew at its fastest for five months
Manufacturing in June grew at its fastest for five months, according to the Markit/CIPS purchasing managers’ index, which rose to 52.1 from 50.4 the previous month.
Above 50 means expansion and most economists had predicted a reading just below this figure.
The sector, which makes up about 10 per cent of Britain’s economic output, is still set to show a decline of 0.5 per cent over the second quarter after weak performances in April and May, but economists took heart that it had appeared to shrug off Brexit uncertainty.
Output growth strengthened to a three-month high and new orders grew at their quickest pace since last October, mainly due to a resilient domestic market but also a “marginal uptick” in new export business.
The manufacturing sector makes up about 10 per cent of Britain’s economic output
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Manufacturing has started to move out of its early year sluggishness
There were higher sales to the US, mainland Europe, Russia and East Asia, but the sector also posted its sixth straight month of job losses.
Markit senior economist Rob Dobson said: “The latest PMI signalled that manufacturing has started to move out of its early year sluggishness. There were signs that the trend in new export business was starting to pick up.”
Output growth strengthened to a three-month high
Howard Archer, chief UK economist at IHS Global Insight, said: “There have recently been some positives for manufacturers, notably a more competitive pound and still pretty low oil and commodity prices, which support their ability to price competitively to try and gain business. The fundamentals are still largely decent for UK consumers, which supports demand for consumer durable goods.”
Ms Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: “Today’s PMI gives us another positive data point for the UK’s manufacturing sector.”