Manufacturing bolsters economic recovery
News figures show that the UK manufacturing sector maintained output and new order growth in May.
As manufacturers ramped up production to meet strong inflows of new work from domestic and export markets, the benefits were also shared with the wider economy through job creation and rising levels of input purchasing.
At 57.0 in May, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index (PMI) posted close to April’s five month high of 57.3. The PMI has now signalled an improvement in overall operating conditions in each month since March 2013.
According to the PMI, manufacturing production increased for the fifteenth successive month in May, reflecting improved order books and stronger economic conditions.
The recovery remained broad-based, with noticeable expansions of output and new orders registered across the consumer, intermediate and investment goods sectors.
Investment goods producers saw an especially marked acceleration in the rate of increase in new orders, representing a positive bounce following slower demand growth in March and April
New export orders rose for the fourteenth consecutive month in May with companies reporting improved demand from the US, Asia, Canada, Europe, the Middle East and New Zealand. Where an increase was signalled, this was linked to new product launches and efforts to increase market share.
Manufacturing employment increased for the thirteenth month running. Jobs growth was broad-based across consumer, intermediate and investment goods producers and at SMEs and large companies. With both employment and output rising, manufacturers reduced the level of work - in-hand at their factories for the third month in a row.
In a statement, Neil Prothero, deputy chief economist at EEF said: ‘Despite the headline number edging marginally, lower manufacturing remains in strongly positive territory and well above the index long-term average, underlining the important role being played by industry in the UK’s continuing recovery.
‘The sector is firmly on track to expand for a fifth consecutive quarter, its strongest performance in four years. Signs of a pick-up in export orders are especially welcome, as the broader rebalancing story still requires a significant boost in net trade to support the recent rebound in business investment.’