Engineering news
Growth in the UK’s manufacturing sector has eased and the weak pound is further driving up firms’ prices, according to new figures.
The manufacturing Purchasing Managers’ Index fell to 53.4 in November from 54.2 in October, according to the latest statistics from IHS Markit/CIPS. However, it remained above the 50 level that separates an expansion from a contraction.
The manufacturing sector has grown for the past four months, but growth has eased in output and new orders from the highs reached in September.
Sterling, which has dropped sharply since the EU referendum in June, continues to push up manufacturers’ costs, prompting an increase in prices. Selling prices rose for the seventh month, and at a rate close to October’s 64-month high.
Rob Dobson, senior economist at IHS Markit, said: “Although the recent growth spurt showed further signs of slowing, the pace of expansion is still solid and above its long-term trend. This should be sufficient to ensure manufacturing is a positive contributor to fourth quarter GDP.”
However, he added: “The concern is that higher costs may in time offset any positive effect of the weaker exchange rate, especially given that export order book growth has already waned markedly from September’s five-and-a-half year high.”
Stephen Cooper, head of manufacturing at KPMG UK, said: "Although UK manufacturing growth felt a slight chill in November, the Christmas bells are ringing for a positive end to the year as the sector looks set to contribute to economic growth for the fourth quarter.
"Globally, the picture looks positive as well with the Eurozone, US and Japan all posting positive results. Overall, Christmas seems to have come early for global manufacturing," he concluded.