Manufacturing continues upward march

The PMI was 58.4 last month compared with an upwardly revised 56.5 in October. It has now signalled expansion for eight consecutive months. The sector's improved performance reflected substantial increases in both manufacturing production and new orders, with rates of growth in both at or near 19-year highs. The upturn remained broad-based, with all of the sub-sectors covered by the survey reporting increases in output and new business. The domestic market remained the prime pillar of new order growth. But companies also benefited from rising export orders in November. Although the rate of growth in overseas demand was less marked than October's 32-month high, it was still among the steepest registered post the global financial crisis. Manufacturers reported further stock depletion with the rate of reduction in post-production inventories one of the sharpest during the past three-and-a-half years. This took the new orders-to-finished goods inventory ratio to a survey-record high, suggesting that production growth will be maintained in the coming months. Employment rose for the seventh consecutive month, with the rate of increase accelerating to a two-and-a-half year record. Rachel Pettigrew, senior economist at EEF, said: "Today's data adds to the volume of positive news about UK manufacturing and suggests the sector should see sustained strong growth in the final three months of this year. "While manufacturers reported some concerns about rising input costs, both for raw materials and utilities, on the whole the survey showed a broad based recovery, with growth in both domestic and export orders. While we expect to see a slight contraction in output overall in 2013, the year ahead should see the manufacturing sector outpace growth in the wider UK economy."