Export recovery lifts outlook for manufacturers
THE UK’S manufacturing sector hit an eight-month high growth rate last month, a set of new data shows.
A survey of private sector firms – Markit’s purchasing managers’ index – climbed to a score of 54.4 in March from February’s 54, according to figures released yesterday.
Any score above 50 marks expansion, with higher figures pointing to stronger growth.
Manufacturers reported the steepest gain in incoming new business since July 2014. Most of this was due to a strong domestic market, but exporters did see a modest increase in overseas demand.
Orders improved from a broad range of markets including the US, China, Germany, the Netherlands, Canada and the Middle East. Meanwhile, manufacturing employment increased for the 23rd consecutive month in March, with further job creation recorded across small, medium and large producers.
“The sector is on course for output growth ranging around 0.6 per cent over the opening quarter as a whole, a positive contribution to broader economic expansion and its best performance since the first half of last year,” said economist Rob Dobson from Markit. The manufacturing sector makes up about 10 per cent of the UK’s total economic activity.
The outlook for the sector has been boosted by the gradual recovery in exports. So far, growth in the manufacturing has been driven by strong UK demand.
“Having been reliant almost solely on domestic demand in recent months, the sector now appears to be benefitting from a steady pickup in exports, with the balance for orders at its strongest for seven months,” said Martin Beck, senior economic adviser to the EY Item Club – a group of economic forecasters. “The benefits of stronger activity in the Eurozone are more than offsetting the drag from the recent appreciation of sterling against the euro.”