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UK manufacturing jobs grow at their fastest for 33 months

03 March, 2014

Last month, the UK manufacturing sector added jobs at the fastest rate since May 2011. The sector maintained a strong upswing during February, with levels of production and new business continuing to rise at above-trend rates, according to the latest Markit/CIPS Purchasing Manager’s Index (PMI) survey.

The PMI hit 56.9 in February, up from 56.6 in January, signalling improved operating conditions for the eleventh straight month. Strengthening domestic market remained the primary driver of the manufacturing recovery, underpinning the 11th successive monthly rise in production volumes.

Underpinning the rise in employment were signs of strain on the capacity of some firms, as highlighted by a slight gain in backlogs of work during the month.

Rob Dobson, senior economist at survey compilers Markit detects a “mini-renaissance in manufacturing” in the UK. “The survey suggests we should expect another quarter of robust economic growth in the opening quarter of the year,” he says, adding that the higher PMI in February provides “welcome reassurance that the sector has weathered the storms and flooding in parts of the country during the month. Growth of production and new orders lost only a little momentum and are still rising at above trend rates.

“This is also driving the sharpest job creation since the middle of 2011, which will support the broader economic recovery through improved consumer confidence and spending,” Dobson adds.

The Markit/CIPS manufacturing PMI for the UK (50 = no change)

New export business also improved in February, but the rate of increase eased from January’s near three-year record. Dobson describes the slower increase in new export orders as “a bit disappointing”, and attributes it, in many cases, to the recent appreciation of sterling.

“UK manufacturing remains remarkably resilient in February, with employment levels speeding ahead,” comments David Noble, CEO at the Chartered Institute of Purchasing & Supply. “Driving the trend of recovery this month was the rate of increase in staffing levels, which reached a 33-month high. Increasing levels of production, new orders amongst the steepest in the survey’s history and positive expectations, helped sustain this solid growth and are encouraging signs for the next few months.

“Supporting the industry’s upswing in February was the strong domestic market which was the prime source of new business and sale volumes," Noble adds. "Conversely to the previous month, overseas demand, despite remaining elevated, lost some of its impetus, with exchange rate fluctuations playing a part."




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