SURGING OUTPUT and an influx of orders helped manufacturing activity grow last month at a much faster rate than expected, a survey showed on Thursday, boding well for the swift economic recovery.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) rose in April to 57.3, its highest reading since November, compared a March reading of 55.8 that was revised up from 55.3. Readings above 50 denote growth.
In further signs of strength in manufacturing, which accounts for around a tenth of the economy, factories took on staff at a faster pace last month.
The output index rose sharply to an eight-month high, while new orders grew at a faster rate thanks to improved demand from domestic and export markets.
“This places the sector perfectly to build on the robust 1.3 percent expansion in manufacturing production reported by the first estimate of Q1 GDP,” said Rob Dobson, senior economist at survey compiler Markit.
Britain’s economy grew 0.8 per cent quarter-on-quarter in the first three months of the year, and 3.1 per cent compared with the same period a year ago - its best showing in more than six years.
Inflation fell to its lowest in over four years in March, and the latest PMI showed price pressures in manufacturing eased further in April.
“The backdrop ... remains one of generally subdued inflationary pressures in the UK, meaning that the Bank of England will likely maintain a wait-and-see track until later in the year,” said Mr Dobson.
Martin Beck, senior economic adviser to the Ernst & Young ITEM Club, said the survey pointed to broad-based economic expansion with the consumer, intermediate and investment goods sectors all seeing strong growth.
He added: “Despite sterling climbing even higher over the last month, April’s survey pointed to an increase in manufacturing export orders.
“And the strong pound may be providing some offsetting benefits, with average purchase prices paid by manufacturers falling for the second successive month, driven in part by lower import costs.
“With the most recent CBI Industrial Trends Survey finding optimism among businesses at its highest level since 1973, momentum in manufacturing output looks set to continue.
“All in all, it looks like the sector is set for a bright spring and summer.”