Figures from the latest IHS Markit (
www.ihsmarkit.com) /CIPS UK Manufacturing Purchasing Managers’ Index (for December 2018) show strength and a significant improvement on the performance of recent months, achieving a six-month high of 54.2 ( a figure above 50.0 indicates an improvement, below 50.0 a decline); this compares with November’s seasonally adjusted figure of 53.6 and October’s “disappointing” 51.1 result.
December’s corresponding figure for the euro-zone was 51.4. Data shows that new business has increased steadily since the drop in October, with increased industry confidence apparent for the year ahead.
Increases in stock contributed to growth in the manufacturing sector, with new orders at their highest level for 10 months, from domestic and international markets.
Cost pressures have also eased, with input costs falling to their lowest level for two and a half months. However, output costs were up, reflecting price increases being passed on to customers and poor exchange rates.
David Johnson, founding director of currency specialist Halo Financial, said: “Overseas demand is up, with new orders flowing in from the USA, Africa, Europe, China, Brazil and India, as UK manufacturers put their Brexit preparations into practice and clients begin to build stocks in preparation for Brexit disruption.
“Export orders have also continued to increase, boosted by the weaker pound.
“Last month, we saw export markets flatten, as fears about the impact of Brexit, US-China tensions and other geopolitical concerns began to bite; but as we have been observing in the industry since the referendum, businesses are ‘rolling up their sleeves’ and ‘getting on with it’, preparing for Brexit and what it might mean — and taking steps to engender growth.
“Optimism about the future of UK manufacturing remains positive, although there is a degree of trepidation as we wade into the unknown.”