New data brings Christmas cheer for UK manufacturing
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Readings from the manufacturing industry's best known barometer reached record levels in November with the well-regarded Purchasing Managers' Index (PMI) hitting a 16-year high and sector jobs growth accelerating to a survey record rate.
The monthly Markit/CIPS UK Manufacturing PMI was at its highest level since September 1994, with faster growth of output and new orders leading to the record job creation although cost pressures rose sharply amid widespread raw material price increases.
With the improvement in UK manufacturing operating conditions during the month, employment rose at the quickest pace since the survey began in 1992, reflecting stronger growth of output and faster inflows of new work and new export orders.
The PMI rose to 58.0, up from 55.4 in October and has remained above the neutral 50.0 mark for 16 months running.
Graeme Allinson, head of manufacturing at Barclays Corporate, said the very promising picture capped a very positive year for UK manufacturing, with the outlook for the 2011 pointing towards steady, continued growth. However, while UK manufacturing may not have suffered the dramatic falls in output felt in other nations, Allinson noted that it has not seen the stellar recoveries demonstrated by its Northern European neighbours, particularly Germany. "The manufacturing model in Germany should also be something we now seek to emulate, with the Government doing well to keep this in the forefront of their thinking," he added before warning that "Conversely, the recent crisis in Ireland has highlighted how dangerous our dependence on established markets can be. Even when these markets return to stability they will not offer the substantial opportunities for growth presented by BRIC nations. As Germany sees its products move at an increasing pace into emerging markets, the UK should again be looking closely at ways to replicate this success."
PMI author Rob Dobson (pictured) said the new data had confounded the consensus forecast of weaker growth and came at a time when stronger manufacturing expansion may well be needed to offset a likely slowdown in consumer spending as austerity measures start to bite.
David Noble, CEO at the Chartered Institute of Purchasing & Supply said the figures had brought "some early Christmas cheer for the UK manufacturing sector, particularly the record-breaking growth in employment figures".
Meanwhile, the Eurozone version of the PMI data showed marked national disparities as stronger growth in Germany and France contrasted with contractions in Spain and Greece.
