UK production levels have hit a four high according to the latest IHS Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) survey data. The latest statistics from the PMI show production growth in November, leading to faster job gains but also higher prices.
The PMI rose from 56.6 in October to 58.2, the highest figure since August 2013. The statistics show that output growth accelerated considerably to its second-highest in three-and-a-half years, fuelled by the largest monthly influx of new orders for four years. Export orders showed one of the greatest monthly increases seen over the past six-and-a-half years, indicating that robust economic growth in key trading partners such as the Eurozone is helping to counter any adverse effect of the recent strengthening of the pound.
Domestic demand also provided a major stimulus to production, with an especially-encouraging upturn in new orders for capital equipment, such as plant and machinery, which points to rising domestic investment spending. November saw the largest monthly rise in new orders for these investment goods for over two decades.
The PMI investment goods new orders series correlates well with official (ONS) data on business investment but is available well before official data are published. The recent upturn therefore indicates that investment growth has picked up markedly in the fourth quarter so far.
The survey also brought welcome news on employment, with manufacturing jobs being created at the fastest pace since June 2014 and a rate that has rarely been exceeded in the survey’s 25-year history.
