UK manufacturing industry grows at fastest rate since 2014
According to data from research firm IHS, it showed industry performance increased to a 30 month high of 55.2 in August, up from 53.3 in July. With anything above 50 indicating growth, these figures show that the industry is set for a full recovery.
Underpinning the growth is the fastest increase in new orders since November 2017. The domestic market has remained the prime source of new contract wins, although manufacturers also mentioned improved demand from the EMEA region, North America and Australia.
Input price inflation hit a 20-month high in August. It is thought that the increased costs were linked to reduced availability for certain inputs and supply chain disruption caused by COVID-19. Manufacturers also mentioned exchange rates and increased freight costs. Part of the increase was passed onto customers, with selling prices rising at their fastest pace since March.
Duncan Brock, director at the Chartered Institute of Procurement & Supply, commented: “Domestically, customers are playing their part in the recovery of the UK economy, with an upswing in new orders accelerating to the fastest rate since November 2017.
“A smidgen of good news from overseas too with a small uplift in export offers for the first time in nearly a year as optimism across the board was maintained that business could only get better.
“It seems the sector may be experiencing a ‘V’ shaped recovery with the fastest rate of growth in the manufacturing sector since May 2014.”
However, despite the positive figures, economists anticipate it could still take several months to fully recoup the output lost since the beginning of the pandemic.