Manufacturing output in the UK has hit a four-year high, according to new figures from IHS Markit.
The ‘IHS Markit/CIPS Purchasing Managers Index’ rose to 58.2 in November, up from 56.6 in October. This was the highest level since August 2013.
Manufacturing production expanded at its fastest pace since September 2016, and to one of the greatest extents during the past four years.
Companies attributed the growth to stronger levels of new orders, which reflected solid domestic demand and steeper gains in new export business.
Some companies noted higher sales to clients in Europe, the Americas, Asia and the Middle East, according to the index, with the weakened pound continuing to boost export competitiveness.
Strong and accelerated growth of production and new orders was registered across the consumer, intermediate and investment goods industries.
Backlogs of work in UK factories increased for the first time in six months during November.
Tighter capacity, combined with rising demand, encouraged companies to increase staffing levels, which rose for the sixteenth consecutive month. The rate of jobs growth was the highest since June 2014.
November also saw purchasing costs rise at a pace close to October’s seven-month high, which reflected increased commodity prices, exchange rate effects and higher vendor prices due to supply-chain constraints.
Manufacturers maintained a positive outlook for the sector in November, with 50% expecting production to be higher in one year’s time. Optimism was linked to company growth plans, capital spending, improving market conditions and efforts to grow client bases.
Rob Dobson, director at IHS Markit, said: “UK manufacturing shifted up a gear in November, with growth of output, new orders and employment all gathering pace. On its current course, manufacturing production is rising at a quarterly rate approaching 2%, providing a real boost to the pace of broader economic expansion. “The breadth of the rebound is also positive, with growth strengthening across the consumer, intermediate and investment goods industries. Of real note was a surge in demand for UK investment goods, such as plant and machinery, with new orders for these products rising to the greatest extent in over two decades. This suggests that capital spending, especially in the domestic market, is showing signs of renewed vigour.
“On the price front, rates of inflation in input costs and output charges remained elevated. Manufacturers have seen supply-chain constraints and rising demand for raw materials overtake exchange rate effects as the primary motivator of price increases. The coming months should provide greater evidence on any impact that the recent interest rate increase from the Bank of England will have on reining in cost pressures.”