UK manufacturing sector growth improves in November

According to the report from IHS Markit/CIPS, the upturn in the UK manufacturing economy strengthened during November, as rates of growth in output and new business accelerated and the downturn in employment slowed. The upcoming end to the Brexit transition period meanwhile led to rising levels of input purchasing, stockpiling of raw materials and stronger gains in new export business as EU-based clients brought forward orders.

The seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index (PMI®) rose to a 35-month high of 55.6 in November, up from 53.7 in October. The PMI has now signalled expansion for six successive months. Manufacturing production increased again in November. Although the rate of expansion was both solid and above that registered in the prior survey month, it was also weaker than those seen through the third quarter of the year. The upturn in production volumes was linked to companies reopening following COVID-19 closures earlier in the year and improving demand.

November saw a marked divergence between different sectors within manufacturing. The intermediate and investment goods industries both registered robust and accelerated growth of output. In contrast, the downturn in the consumer goods sector continued, with back-to back decreases in both production and new business.

The overall volume of incoming new business rose during November, albeit to a slightly lesser extent than the prior survey month. Manufacturers saw higher inflows of new work from overseas, in part boosted by EU clients bringing forward purchases before the Brexit transition period ends. There were also reports of higher intakes from Asia and the US.