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-UK November Manufacturing PMI 58.2 Vs Revised 56.6 in October
By Jamie Satchithanantham
LONDON (MNI) - UK manufacturing sector activity shifted up another gear in
November, with activity expanding at a pace not seen since the summer of 2013,
the IHS Markit/CIPS Purchasing Managers' Index (PMI) showed.
The headline manufacturing PMI rose to 58.2 in November from an upwardly
revised 56.6 (previously 56.3) in October, to stand at the highest level since
August 2013. The rise meant that the index has sat above the neutral-50 mark for
sixteen consecutive months and reflects elevated levels of both output and
Production rose at the fastest pace since September 2016 and at one of the
greatest extents in the past four years. According to IHS Markit, firms
attributed this uptick in activity to solid domestic and steeper foreign demand.
New orders came in stronger in November and this was broad base across the
consumer, intermediate and investment goods industries. Of note, there was a
marked increase in investment goods new orders which recorded its highest
expansion since August 1994.
Elsewhere, the survey reported order backlogs on the up for the first time
in half a year, greater job creation (the rate of job growth was the highest
since June 2014 in November) and, like October, elevated input prices.
"On its current course, manufacturing production is rising at a quarterly
rate approaching 2%, providing a real boost to the pace of broader economic
expansion," Rob Dobson, Director at IHS Markit, said.
"Manufacturers have seen supply-chain constraints and rising demand for raw
materials overtake exchange rate effects as the primary motivator of price
increases. The coming months should provide greater evidence on any impact that
the recent interest rate increase from the Bank of England will have on reining
in cost pressures," he added.
Specifically on the jump in investment goods new orders, Dobson said that
it suggested that "capital spending, especially in the domestic market, is
showing signs of renewed vigour".
On November 21, the Confederation of British Industry's (CBI) Industrial
Trends Survey also reported a surge in manufacturing output growth.
The survey's total order balance stood at the highest level in nearly 30
years, driven by healthy external demand - the export order books balance were
the joint highest in more than 20 years. Future activity was expected to remain
healthy. Expected output in the three months to next February continued to grow,
though at a moderated pace.
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