The UK’s Manufacturing Purchasing Managers’ Index (PMI) has jumped to 55.4 in September as the sector grew at its fastest rate since mid-2014. The Markit/CIPS index has risen from 53.4 in August due to strong growth in output, new orders and employment.
According to research company Markit, the domestic market has been a prime driver of new business wins, while the weaker pound has helped to increase new orders from overseas, which include higher demand from Asia, Europe and the US.
The strong rebound in the manufacturing sector since the Brexit vote has resulted in the best quarter average in the year to date.
IHS Markit senior economist Rob Dobson says: ‘The rebound over the past two months has been encouragingly strong, and puts the sector on course to provide a further positive contribution to GDP in the third quarter.’
Growth in the consumer goods sector has increased at its quickest pace in a year and a half, helping manufacturing production to expand at the quickest pace in two years.
Chartered Institute of Procurement & Supply CEO David Noble says: ‘Purchasing activity also increased at one of the quickest rates for over two years, impacting on suppliers’ delivery capabilities.'
‘This led to the sharpest lengthening in delivery times since May 2011, as higher demand for inputs reduced stock levels at vendors.’
The impressive rebound in the manufacturing industry has boosted employment as job creation has been linked to increased capacity requirement and the launch of new product lines.
However, the weaker pound has led to higher import costs, which led to higher average purchase prices last month and was partially passed onto clients through increased charges.