Britain’s manufacturing sector is on a charge, and has rebounded strongly from its initial post-Brexit downturn, according to the latest data released by IHS Markit on Thursday morning.
IHS Markit’s growth data shows that Britain’s factories recorded activity of 53.3 in August, the highest level in 10-months and a huge acceleration from July’s reading, when the sector slipped into contraction, falling at its sharpest level since 2009.
The purchasing managers index (PMI) figures from IHS Markit are given as a number between 0 and 100.
Anything above 50 signals growth, while anything below means a contraction in activity — so the higher the number is, the better things look for the UK.
The numbers are something of surprise, with a reading of 49 expected.
Speaking about the data, IHS Markit senior economist Rob Dobson said (emphasis ours):
“The August PMI data indicate a solid rebound in the performance of the UK manufacturing sector from the steep downturn that followed the EU referendum. Companies reported that work that had been postponed during July had now been restarted, as manufacturers and their clients started to regain a sense of returning to business as usual. The domestic market showed a marked recovery, especially for consumer products, while the recent depreciation of sterling drove higher inflows of new business from the USA, Europe, Scandinavia, Middle East and Asia.”
David Noble, CEO of CIPS, which helps compile the survey, added:
“The Brexit brakes are off, as the sector surged ahead with the PMI hitting a 10-month high reflecting rapid expansions in both activity and new orders.
“Fuelled by a combination of export and domestic orders, the increase in the level of the headline PMI equalled its best during the survey’s quarter of a century history.”
Here is IHS Markit’s chart, showing the big jump between July and August in Britain’s manufacturing sector:
Earlier on Thursday, eurozone manufacturing PMI data showed that there may be “a Brexit impact” starting to creep into the continent’s factories, something that had previously failed to materialise. Markit’s manufacturing PMI for the eurozone fell from 52 at the end of July to 51.7 in August, missing the earlier flash estimate of 51.8.
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