After record highs of 58.2 for November’s Manufacturing Purchasing Managers’ Index (PMI), December saw slightly lower rates of growth at 56.3, yet still ended the year on a high, with solid increases across new business, output and employment in the sector. The survey results have produced an index reading above the all-important growth figure of 50.0 for almost a year and a half, with the average result of 57.0 representing the best results for the British manufacturing sector for four years.
New order growth and product development has led to an increase in production and employment for the sector, with output growing in the investment goods and intermediate sectors once again for December.
There has been strong growth in new UK manufacturing exports, in particular to the USA, Europe, the Middle East and China.
David Johnson, founding director of currency specialists, Halo Financial, observed, “There has been a welcome easing of cost increases in December, which is a positive sign for the industry, as import costs fell to the lowest in four months. Inflationary pressures remain, however, as the cost of raw materials continues to rise; forcing suppliers to put up prices.
“The Sterling exchange rate has also contributed to rising cost pressures, although a relatively weak Pound has supported UK exports throughout 2017. We hope that the various cost pressures across the supply chain will ease further in 2018, as UK manufacturers continue to evolve and expand operations. The manufacturing sector is optimistic for the coming year, which provides some welcome positivity in times of political and economic uncertainty.”
Atul Kariya, manufacturing sector head at accountancy and business advisory firm, MHA MacIntyre Hudson, said, “It’s reassuring to see continued growth for manufacturing in the UK, as a steady stream of new orders and exports flow through. It is also encouraging to see the cost pressures on the sector slowing somewhat, as this has been a key concern over the past year. Beating inflationary and supply chain pressures to continue to produce strong results has improved business confidence for UK manufacturers and this has been reflected in growing employment and product development. Once again, these results show the resilience of British industry.”
Laurence Gavin, partner at law firm, Irwin Mitchell, commented, “December was another solid month for the sector and it was particularly pleasing to see employment levels increase. Manufacturers need to build on this into 2018 and despite the on-going political uncertainty, many will be looking for a strong start supported by continued export growth.”