British factory activity unexpectedly surged to a 16-month high in October helped by a recovery in export orders, a survey showed on Monday, suggesting economic growth could pick up rapidly in the last three months of the year.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) jumped to 55.5 in October from 51.8 in September. That was well above even the highest forecast of 52.5 in a Reuters poll.
The survey indicated Britain’s economy could grow twice as fast in the last three months of the year as it did in the third quarter, data compiler Markit said, although many economists will wait for Wednesday’s survey of the much bigger services sector to get a fuller picture of the pace of recovery.
“The survey is consistent with a quarterly rate of growth of around 1 percent, a vast improvement on what we have seen in recent months,” Rob Dobson, senior economist at survey compilers Markit, said.
“The revival of overseas sales is a particularly encouraging aspect of the latest survey, helping to dispel fears that global demand is slumping and boding well for the outlook.”
Concerns about an economic slowdown in China and other emerging markets have cast a shadow over the global economy in recent months. In response, investors pushed back their expectations of when major central banks are likely to start raising rock-bottom interest rates.
But Monday’s survey showed new export orders increased to their highest level since August 2014.