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UK Manufacturing Continues to Impress

UK manufacturing is “booming again”, according to a survey, with the sector seeing its strongest growth in activity for two and a half years in August.

The latest Markit/CIPS purchasing managers’ index (PMI) for the sector jumped to 57.2. A figure above 50 indicates expansion.

It marks the fifth consecutive month of expansion and is the highest reading since February 2011.

Output and new orders rose at their fastest rate for 19 years.

“The UK’s factories are booming again,” said Rob Dobson, senior economist at Markit.

“Orders and output are growing at the fastest rates for almost 20 years, as rising demand from domestic customers is being accompanied by a return to growth of our largest trading partner, the eurozone.”

The only weak point in the outlook was a “marked upsurge” in cost inflation at manufacturers. The month-on-month leap in input prices was the second biggest in the survey’s history, as commodity prices continued to increase.

In a separate survey, the EEF manufacturers’ organisation said that it had ungraded its forecasts for manufacturing for 2014.

Commenting on the PMI data, Lee Hopley, EEF chief economist, said: “Taken together with improving indicators across most parts of Europe the conditions are right for manufacturers to see continued expansion in the remainder of this year with growth accelerating in 2014.”

via BBC [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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