Markit/CIPS UK Manufacturing PMI released for October

The UK manufacturing purchasing managers’ index (PMI) increased to 55.5, a healthy increase from September’s revised figure of 51.8. The 3.7 increase is the sharpest seen in the almost 24 year history of the survey.

October also saw employment in the manufacturing sector rise for the thirtieth consecutive month, buoyed by new orders and efforts to clear backlogs of work.

Rob Dobson, Senior Economist at Markit commented: “The revival provides a tentative suggestion that the manufacturers are pulling out of their recent funk, having been dogged by recession since the start of the year, and may help boost economic growth in the fourth quarter.

“The big question now is whether this bounceback is a one-off or the start of a sustained re-emergence from recession.

“The ongoing strength of the domestic market and a welcome improvement in new export orders led to a broad-based upturn in production of consumer, intermediate and investment goods. The revival of overseas sales is a particularly encouraging aspect of the latest survey, helping to dispel fears that global demand is slumping and boding well for the outlook.”

Mr Dobson also pointed that most of the growth was attributable to the larger manufacturers. SMEs needed to “join in the recovery to help prevent the upswing from faltering.”

David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply said overseas orders contributed significantly to the growth. He commented: “The sector rode on the crest of an exports market wave taking full advantage of the opportunity to create a surge of output growth and new orders.

“Though domestically orders were still strong, it was export orders primarily from the Middle East, East Asia and the USA, that supported this expansion of work.”

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