Data suggests manufacturing output is expanding at a quarterly rate of between 1 per cent and 1.5 per cent

Manufacturing has 'steady wind' behind it

There is a “steady wind” behind the UK manufacturing sector after figures showed continuing growth in output and new orders.

The overall benchmark figure for the CIPS/Markit manufacturing purchasing managers' index (PMI) survey recorded a level of 56 in October, well above the 50 mark which separates growth from contraction.

While down on the 56.3 of the previous month and August's recent peak of 57.1, economists said manufacturers continue to perform well.

Total new orders rose at a rate close to August's 19-year peak as export business increased at the quickest pace since February 2011. Companies reported improved inflows of new work from regions including Asia, mainland Europe and Russia.

While only accounting for less than 11 per cent of the economy, the current pace of growth in manufacturing should raise hopes of another quarter of strong growth for the UK economy.

The CIPS survey suggests manufacturing output is expanding at a quarterly rate of between 1 per cent and 1.5 per cent. However the sector remains 9 per cent smaller than its pre-crisis peak, while the services sector has already closed this gap.

CIPS chief executive David Noble said: "British manufacturers swept into the fourth quarter with a steady wind behind them, bolstered by strengthening markets both at home and abroad, as well as output growth across the consumer, investment and intermediate industries."

Today's survey showed that employment rose for the sixth consecutive month in October, suggesting that the sector is creating jobs at a solid pace.

October saw average selling prices rise for the fourth straight month, reflecting a combination of rising input costs and continued growth of new orders. Purchase price inflation eased further from August's two-year high.

Samuel Tombs, UK economist at Capital Economics, said the survey was another encouraging sign that the sector is now recovering rapidly.

"With domestic consumers' real incomes still under pressure, the manufacturing recovery may struggle to gain much more pace,” he said. "But UK manufacturers remain well placed to benefit from growing overseas demand and a pick-up in business investment."

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