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Manufacturing PMI Hits high as growth strengthens

Manufacturing PMI Hits high as growth strengthens

Added to MTDCNC by MTDCNC on 11 January 2017

According to the CIPS Purchasing Managers’ Index® (PMI®), the UK manufacturing sector ended 2016 on a high. Rates of production growth and new orders in December were the highest for the past two-and-a-half years.

The seasonally adjusted Markit/CIPS Purchasing Managers’ Index® (PMI®) rose to a 30-month high of 56.1 in December, up from 53.6 in November and well above its long-run average (51.5). The headline PMI has signalled expansion in each of the past five months.

Growth of production and new business was broad-based by sector, with strong gains registered across the consumer, intermediate and investment goods industries. However, the increases seen at consumer goods producers were relatively mild in comparison to those seen in the other sectors.

New export business rose for the seventh successive month in December. Furthermore, the rate of growth was the second-highest since early- 2014, bettered only by that signalled in September 2016. Companies reported increased levels of new work from the USA, Europe, China, Middle East, India and other Asian markets.

Improved inflows of new business led to a slight increase in backlogs of work in December, the first rise since February 2014. This combination of higher output, new orders and work-in-hand encouraged manufacturers to expand capacity.

Employment rose for the fifth consecutive month in December, with the pace of jobs growth accelerating to the fastest in 14 months. SMEs saw the steepest expansion of staffing levels, although large-scale producers registered a modest increase too.

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