LONDON — Britain’s manufacturers saw growth surge in August as new orders from both the USA and Europe flooded into the country and supported the sector, according to the latest PMI reading from IHS Markit.
Britain’s manufacturing sector saw a reading of 56.9 in the month, up from 55.3 in July, and even further ahead of the 55 reading shown in August’s flash estimate
The PMI reading, given between 0-100, measures activity in the sector — anything above 50 signals growth, while anything below means contraction.
“All five of the PMI components — output, new orders, employment, suppliers’ delivery times and stocks of purchases — were consistent with a stronger performance for the manufacturing industry during August,” a statement from IHS Markit said.
Sterling — which is around 13% lower than its pre-referendum level against the dollar — has been a key driver of the resurgence in the UK manufacturing sector since last June, and that remained the case in August, IHS Markit said.
“Companies linked gains in new export work to increased business from mainland Europe, the USA, China and Australia. The historical weakness of the sterling exchange rate was also reported to have boosted export competitiveness.”
Commenting on the numbers, Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, which compiles the survey alongside IHS Markit said:
Market forces continued to be supportive of the sector this month, as purchasing activity was strong, more jobs created and new orders rose across all three sectors, for companies large and small. Buoyed up by a rebound in domestic demand, the sector’s overall performance was one of the strongest since 2014. “New export orders didn’t disappoint either with new business wins from Europe and the USA — which all supported the sector’s fastest rise in jobs growth since June 2014.
Here’s the chart showing manufacturing’s performance in context of the longer term trend: