Companies reported solid orders from both domestic and overseas markets as the PMI reached 53.3 last month, a sharp recovery from the 41-month low of 48.3 in July following the EU referendum. This five-point gain represented the joint highest month-on-month raise in the almost 25-year history of the survey.
Manufacturers have shown their resilience, with production rising at the fastest rate for seven months during August, largely thanks to improved sales volumes to markets including the USA, Europe, China and the Middle East. The depreciation in the value of the sterling since the Brexit decision has been cited by many manufacturers as the reason behind the growth in export volumes.
“It is too early to say whether the rebounds in growth and inflation will be sustained, but the upturn in August suggests that the weaker exchange rate and recent policy action have helped to avert a downturn,” said Rob Dobson, senior economist at IHS Markit.
Dave Atkinson, head of manufacturing at Lloyds Bank Commercial Banking (pictured), added: “British manufacturers have responded to the post-EU Referendum landscape by adopting a positive mind-set and adapting to the conditions in front of them to source new opportunities for their business.
“Growth is being driven by exporters, with manufacturers experiencing increased demand for goods from both existing markets and uncharted territories due to the weakened pound.”
Stephen Cooper, head of manufacturing at KPMG UK, called the results "spectacular", but added a caveat for businesses to be cautious of. “One swallow does not a summer make, and as autumn progresses, we will see if this is a blip, or whether it’s the start of a long-term trend," he warned. “UK manufacturers need to continue to use the momentum of their newfound competitive price for as long as possible, and, as ever, to continue to practice careful management, and accurate forecasting of the supply chain."
