Newspaper article The Journal (Newcastle, England)

Manufacturing Sector in Two-Year High for Output

Newspaper article The Journal (Newcastle, England)

Manufacturing Sector in Two-Year High for Output

Article excerpt

Byline: MANUFACTURING BEN WOODS business@ncjmedia.co.uk

OUTPUT in Britain's manufacturing sector reached its highest level for more than two years as the sector continued to bounce back from a post-Brexit vote slump.

The Markit/CIPS UK Manufacturing purchasing managers' index (PMI) said output hit 55.4 last month, up from 53.4 in August, and above economist expectations of 52.1.

A reading above 50 indicates growth.

The move means output hit its highest level since June 2014 in September and shows a marked improvement since it dropped to 48.3 in July, the first month after Britain voted to leave the European Union.

Rob Dobson, senior economist at IHS Markit, said: "The rebound over the past two months has been encouragingly strong, and puts the sector on course to provide a further positive contribution to GDP in the third quarter."

Conditions in the manufacturing sector brightened towards the end of the third quarter, with growth accelerating for output and new orders, the report said.

Output rose at its quickest in one and a half years in the consumer goods sector, while manufacturing production saw its fastest expansion since May 2014.

New orders were also on the rise in domestic and overseas markets, with the fall in the value of the pound against the US dollar and the euro since the Brexit vote helping export sales to expand.

It said the level of incoming new export orders rose at its fastest pace since January 2014 amid a growing appetite for British products from America, Europe, Asia and some emerging markets.

"The weak sterling exchange rate remained the prime growth engine," Mr Dobson added.

"The domestic market is also still supportive of growth, especially for consumer goods. Further step-ups in growth of new business and output in the investment goods sector may also be a sign that capital spending is recovering from its early-year lull, in the short term at least. …

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