Manufacturing confidence surges with 51.3 PMI posting

Growth of output and new orders accelerated, leading to increased employment, and keeping the index ahead of the neutral 50.0 mark for the second month running. May saw operating conditions improve at the fastest pace in over a year, reaching its highest reading since March 2012. Growth registered by the consumer, intermediate and investment goods sectors. The strongest performance was seen at consumer goods producers. UK manufacturers generally linked higher output to improved new order inflows, successful new product launches and efforts to clear backlogs of work. Rob Dobson, senior economist at survey compilers Markit, said the sector had a spring in its step'. Output was also likely to be raised further in the coming months, as firms refilled warehouses after stronger than expected demand has led to a sharp depletion in finished goods stocks, he added. The tentative return to job creation in the sector also suggested that manufacturers were becoming more confident in the outlook. CIPS CEO David Noble said: "Optimism abounds in the manufacturing sector", adding that the industry, battered and bruised in the last 18 months, was still building from a low base but was now on a solid foundation which boded well for the future.