Manufacturing registers strong and encouraging growth

The UK manufacturing industry remained buoyant last month, reaching its highest level of expansion in almost 16 years.

According to the latest CIPS/Markit Manufacturing Purchasing Managers’ Index – where a figure above 50 represents growth – total activity in the sector registered 57.2 in March. This was up from the previous month’s figure of 56.5.

Output for March rose for the 10th month in a row, with the index coming in at 61.9 – a stronger performance than February’s figure of 59.8. The rate of increase reached its highest since July 1994 and was the second fastest in the survey’s 18-year history.

New orders increased for the ninth consecutive month, expanding at only a slightly slower pace than in January, when growth was at a six-year high. Employment levels fell in March as a result of cost-cutting initiatives, redundancies and workforce restructuring.

CIPS chief executive David Noble said the drop in employment was mainly confined to larger firms and signalled attempts to cut operating costs rather than “dampened demand”.

Commenting on the overall results, he said: “To see such a fast-paced recovery in the manufacturing sector is hugely encouraging. Strong growth in the intermediate goods sector should filter through to consumer and investment goods producers in the coming months, boding well for the sustainability of the upturn.”

Further coverage of PMI reports is available here.