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ECONOMICS COMMENTARY
Nov 03, 2014
UK manufacturing growth accelerates at start of Q4
The UK manufacturing sector made a bright start to the final quarter of 2014, with rates of expansion in production and new business accelerating sharply from their September lows. The pick up in growth mainly reflected the resilience of the domestic market, as overseas demand was impacted by the ongoing economic weakness of the eurozone and the euro-sterling exchange rate.
Rob Dobson, Senior Economist at survey compilers Markit:
"The latest report is a positive marker for the start of the final quarter, as the growth rate of the UK manufacturing sector staged a mini-recovery in October. The headline PMI hit a three-month high, improving on September's low.
"Although the pace of expansion remains below that seen at the start of the year, suggesting the sector will remain only a modest contributor to broader economic growth, it is positive to see the sector break its recent sequence of slower growth. Continued growth of employment, especially at SMEs, suggests that the recovery in the labour market is holding sway.
"Another positive is the continued resilience of the domestic market, which was the main source of new contract wins. However, this was partly offset by a further drop in new business from overseas, as exporters were hit by a near-stagnant eurozone economy and a relatively strong euro-sterling exchange rate. Reports from companies mentioning slower inflows of new business from markets such as the US and China also paint a less than rosy picture for exports moving forward."
Rob Dobson | Economics Director, IHS Markit
Tel: +44 149-146-1095
rob.dobson@ihsmarkit.com
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