Exports have helped Britain’s manufacturers push the latest purchasing managers index figure up 0.9 points to 55.1, a rate of acceleration not seen for three months.
The headline PMI from Markit/CIPS was boosted by new orders, higher levels of production, improved job creation, longer supplier delivery times and a slight increase in inventory holdings.
Output for export increased at levels not seen since April 2010 as companies reported improved inflows of new work from clients in North America, Europe, the Asia-Pacific region and the Middle-East. The domestic market also remained a positive contributor to order books, although not to as great an extent as signalled earlier in the year.
Manufacturing production increased for the twelfth successive month in July with the consumer goods sector witnessing the strongest increase in output, followed by intermediate goods.
Staffing levels rose for the twelfth straight month whilst input prices increased at a the slowest pace in over a year. As with previous surveys, companies linked higher costs to Sterling’s exchange rate, plus price increases for raw materials and shortages of certain inputs. Part of the increase in costs was passed on in the form of higher selling prices.
Output charges rose for the fifteenth consecutive month with UK manufacturers maintaining a positive outlook at the start of the third quarter. Just under half (49 per cent) expect production to be higher in one year’s time.
Positive sentiment was linked to increased export order volumes, new product launches, efforts to improve market share and expand into new markets, global economic recovery and investment in new capacity.
Commenting on the latest PMI results, Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, said: “After hitting a three-month low in June it’s good to see PMI has increased this month.
“Sentiment in the industry is positive and firms are forecasting growth. The latest CBI Industrial Trends Survey found that production has increased at the fastest pace since 1995 and headcount has grown.
“Firms are facing uncertainty around the UK’s future trading relationship with the EU but figures suggest exports are rising with a year-on-year increase of 15 per cent. This is partly a result of the weaker pound but also because more manufacturers are looking at new international markets beyond Europe.
“The news that BMW is planning to build the new electronic Mini at its plant in Oxfordshire is a timely vote of confidence in our industry’s word-class expertise.
“Manufacturers are planning positively for the future with continued investment, product development and new business at home and away.”