British manufacturing grew at its fastest rate in more than two years at the start of the third quarter and looks set to help the recovering economy gain momentum, a survey showed today.
The Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) jumped to 54.6 in July from an upwardly revised 52.9 in June, its fourth straight month of expansion.
The reading was the strongest since March 2011 and beat by a wide margin even the most optimistic forecast in a Reuters poll of economists.
Whether it proves lasting or not, British economic growth is accelerating, with the International Monetary Fund predicting a 0.9 per cent rise in gross domestic product this year, up from a limp 0.2 per cent in 2012.
July’s overall expansion in manufacturing, which accounts for a 10th of Britain’s GDP, was driven by the fastest rises in new orders and output since February 2011.
The subindex for new orders rose to 58.2 in July from 55.4 in June.
Demand for British wares grew both at home and abroad, including in the euro zone - Britain’s main export market.
In addition, stocks of finished goods shrank at the sharpest rate in more than three years, boding well for production in the coming months, survey compiler Markit said.
“There is also a strong export component in these positive numbers, as UK manufacturers benefited from the sharpest growth in new export orders for two years,” said Rob Dobson, senior economist at Markit.
Factories showed more appetite for hiring than at any point in the last two years.
Reuters
