Member Article

Manufacturing recovery retains momentum

The manufacturing recovery remained on track at the end of 2013, as rates of expansion in production and new orders were among the highest in the 22-year history of the UK manufacturing PMI.

Job creation was close to November’s two-and-a-half year record as firms benefited from stronger domestic market conditions, the index from Markit/CIPS revealed.

Output rose for the ninth successive month in December, fuelled by an increase in new work and efforts to clear backlogged work.

Rob Dobson, senior economist at survey compilers Markit: “UK manufacturing’s strong upsurge continued at the end of 2013, with rates of growth in production and new orders still among the highest in the 22-year PMI survey history. On its current track, the sector should achieve output growth of over 1% in the final quarter while filling around 10-15 thousand jobs, continuing its positive contributions to both the broader economic and labour market recoveries.

“The domestic market remains resurgent and is a major factor driving production and new order inflows higher. UK exporters are also finding pockets of strength, with sales of capital and intermediate goods rising solidly to destinations such as Brazil, China, Ireland, Russia and the USA.

“With the manufacturing sector still some 9% off its pre-crisis peak production, the question everyone wants answering is whether this upturn can develop into a self-sustaining recovery. The news is still good on this score, as growth is coming from a broad base that should help keep the rebound on track during the early stages of 2014.

“Output and new orders are rising across all manufacturing sub-sectors and also at SMEs and large-scale producers. The strong performance of intermediate goods manufacturers suggests that firms are refilling their warehouses, while robust growth at consumer and capital goods producers indicates that household and investment spending are also still playing a key role.”

This was posted in Bdaily's Members' News section by Tom Keighley .