The PMI rose to 58.2 in November – up from 56.6 in October (originally reported as 56.3) – its highest level since August 2013 and the tenth-best registered during the near 26-year series history.
Markit says that manufacturing production expanded at the fastest pace since September 2016 and to one of the greatest extents during the past four years. Companies linked this to stronger inflows of new orders, reflecting solid domestic demand and steeper gains in new export business.
Some companies also noted higher sales to clients in Europe, the Americas, Asia and the Middle East. There were also reports that the historically weak sterling exchange rate continued to boost export competitiveness.
The expansion remained broad-based by subsector too. Strong and accelerated growth of production and new orders was registered across the consumer, intermediate and investment goods industries.
Additional findings show that backlogs of work at UK factories increased for the first time in six months during November and staffing levels rose for the sixteenth successive month, with the rate of jobs growth the highest since June 2014.
Output charges also continued to rise at a substantial clip, the fastest for seven months and among the highest during the past six-and-a-half years. Companies linked the latest increase to stronger demand boosting their pricing power and the passthrough of rising costs to clients.
Says IHS Markit director Rob Dobson: “UK manufacturing shifted up a gear in November, with growth of output, new orders and employment all gathering pace. On its current course, manufacturing production is rising at a quarterly rate approaching 2%, providing a real boost to the pace of broader economic expansion.
“The breadth of the rebound is also positive, with growth strengthening across the consumer, intermediate and investment goods industries. Of real note was a surge in demand for UK investment goods, such as plant and machinery, with new orders for these products rising to the greatest extent in over two decades. This suggests that capital spending, especially in the domestic market, is showing signs of renewed vigour.
“On the price front, rates of inflation in input costs and output charges remained elevated. Manufacturers have seen supply-chain constraints and rising demand for raw materials overtake exchange rate effects as the primary motivator of price increases. The coming months should provide greater evidence on any impact that the recent interest rate increase from the Bank of England will have on reining in cost pressures.”
