PMI picks up but remains below the 50 growth mark

The stabilisation was greeted by Rob Dobson, Senior Economist at survey compilers Markit, as providing Chancellor of the Exchequer George Osborne with some better-than-expected news on the performance of the manufacturing economy ahead of the Autumn Statement. However, the index compilers warned that trends in output were uneven across the sector and heavily underpinned by a marked reduction in backlogs of work. Outstanding business fell at one of the fastest rates seen since the current period of decline started in February 2011. Demand from the domestic market remained subdued, while the level of new export orders continued to deteriorate. November saw companies maintain a cost-cautious approach to hiring, purchasing and stock holding. Job losses were reported for the fourth month running, with the rate of reduction accelerating slightly since October. "On a brighter note," said Dobson, "producers of consumer goods indicated that business is holding up well, with output growth surging to a near two-year high. Such growth divergences add to the sense that the UK economy remains overly oriented towards consumption." Andrew Johnson, senior economist at EEF, said the pick up was "somewhat better news" but "the clear message is that a sustained industrial recovery and its contribution to better balanced growth still seems some way off." CIPS CEO David Noble concluded that, "The most that we can say about November's manufacturing performance was that it was simply less bad than the previous month.