UK manufacturing growth at three-year high, survey suggests
Activity in the UK’s manufacturing sector grew at its fastest pace for three years in April, according to a closely-watched survey.
The Markit/CIPS UK manufacturing Purchasing Managers’ Index (PMI) rose to 57.3 from 54.2 in March, well above economists’ expectations.
A reading above 50 indicates growth.
Markit said the sector enjoyed “solid improvement” last month, with new orders being received at the fastest rate since January 2014.
The survey found the main source of new work came from the domestic market, but there was a “solid increase in new export business” due to a combination of better global economic conditions and the weakening of the pound.
The fall in the value of the pound since the Brexit vote in June has made UK goods cheaper for foreign buyers, but has also pushed up the cost of imports for UK companies.
Markit said price pressures faced by manufacturers remained “elevated”, but noted that input cost inflation had “eased significantly” since January.
“Although only accounting for 10% of the economy, the upturn in the manufacturing sector represents some welcome good news after the sharp slowing in GDP seen in the first quarter,” said Rob Dobson, senior economist at INS Markit.
“The big question is whether this growth spurt can be maintained, especially given the backdrop of ongoing market volatility and a number of political headwinds such as elections at home and abroad.
“Other surges seen since the middle of last year have generally proved short-lived, as weak wage growth sapped consumer spending.”
Official figures from the Office for National Statistics last week indicated that the UK economy grew by just 0.3% in the first three months of the year, the slowest rate since the first quarter of 2016.