Manufacturing Sector Adding To Overall Growth

The latest figures from the Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) have shown that the manufacturing sector grew again in November to its strongest level for almost three years.

The Index stood at 58.4 last month, up from 56.5 in October, the highest it has been since February 2011, while the employment sub-index for the sector rose from 51.9 to 54.5, meaning that the industry is creating around 5,000 jobs per month. This is the seventh consecutive month of employment growth and is the fastest pace of expansion for over two years.

Meanwhile, data for another sub-index for new orders also showed an increase, rising from 61.3 in October to 64.6 in November, its highest level in more than 19 years and exports had one of their best months since the start of the financial crisis.

Inflation pressures increased as utility costs rose, but large-scale manufacturers said they were able to raise their selling prices. Output prices rose for a fifth straight month.

Manufacturing groups have said they want the government to take action against the rise in power tariffs when it announces its half-yearly budget review this week.

Commentators are saying that the sector’s data is adding to the overall picture of growth in the economy and forecasts for next year are bright, with the manufacturers’ organisation EEF predicting growth in the sector of 2.7 per cent next year, overtaking the 2.4 per cent predicted for overall economic growth.

The economy grew by 0.8 per cent in the three months to September, making the quarter its best month in more than three years and helped by the 0.9 per cent expansion in the manufacturing sector.