Manufacturing output continued to rise in September, after the three-month low recorded in June.
September saw manufacturing continue its recovery from the steep Covid-19 induced downturn, as global importers continue to demand goods from the UK.
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) recorded a small dip in September to 54.1, following August’s two-and-a-half year high of 55.2.
This showed the longest consecutive expansion of output since early 2019, with PMI maintaining figures above the no-change mark of 50.0 for four successive months
The Purchasing Managers’ Index (PMI) is an economic, survey-based indicator of business activity, in the manufacturing and services sectors. Above 50 denotes expansion in business activity and anything below 50 denotes contraction.
Increased production was triggered by a rise in new work as companies reopened and more staff returned to work. While all sectors experienced growth, intermediate goods saw the fastest surge.
Export business was the strongest in almost two years as September records showed a second successive month of growth.
UK exports improved due to global economies easing Covid-19 restrictions and stronger demand from Europe, Asia and North America.
New business has continued to rise since July due to a combination of improving customer demand, rising export orders, recovery in the retail sector, and the reopening of schools.
Manufacturers increased selling prices as input cost inflation hit a 21-month high due to higher raw material costs, rising competition and demand for inputs and consequent supply shortages, resulting in longer vendor lead times.
Manufacturers remained hopeful, with three-fifths of respondents (60%) expecting output to improve in 12 months, with overall confidence close to July’s 28-month high. Concerns around Covid and Brexit uncertainty are on the rise.
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