Engineering news
Manufacturing operating conditions improved at their fastest pace in more than a year in May, with growth of production and new orders both accelerating, according to the latest Markit/Chartered Institute of Purchasing and Supply survey.
At 51.3 in May, up from a revised level of 50.2 in April, the seasonally adjusted Purchasing Managers' Index (PMI) posted its highest reading since March last year. Any figure above 50 indicates expansion. Markit said the sector was continuing to enjoy a much improved second quarter.
The strongest performance was seen among consumer goods producers. “UK manufacturers generally linked higher output to improved new order inflows, successful new product launches and efforts to clear backlogs of work,” Markit said. There were rises in both domestic and export orders and job creation was noted for the first time in four months, Markit said.
Carl Williamson, manufacturing sector lead at Lloyds Bank Commercial Banking, said: “Manufacturers have mirrored the renewed confidence seen in the general economy, which has been driven by lower price inflation, rising equity markets and firmer economic activity, domestically and abroad.
“More stable working conditions will hopefully encourage manufacturers to use their cash reserves to make capex investment and target growth, rather than treading water by focusing solely on maintaining working capital.”
David Noble, chief executive at the Chartered Institute of Purchasing and Supply, said the numbers indicated a “solid foundation” for manufacturing which “bodes well for the future”.
“Optimism abounds in the manufacturing sector as continued growth, improving economic conditions, new orders and job creation all contribute to a 14-month high for the PMI in May.
“The industry, battered and bruised in the last 18 months, is still building from a low base and as ever, there's more work to do.”