August saw solid rebounds in UK manufacturing output and incoming new orders, according to the Markit/ CIPS Purchasing Managers’ Index (PMI). Companies reported “solid inflows” of new work from both domestic and export customers, the latter aided by the sterling exchange rate. As a result, the PMI recovered sharply from the 41-month low of 48.3 posted in July, following the EU referendum, to 53.3 in August.
Improved sales volumes to markets such as the USA, Europe, China, South-East Asia, the Middle East and Norway were noted, with the depreciation of sterling by far the main factor manufacturers cited as supporting the upswing in new export work. There were also reports of stronger demand, product launches and clients committing to new and previously postponed contracts.
The negative consequences of currency movements were felt in the form of rising input costs during August but employment rose for the first time during the year-to-date, albeit only moderately. Job creation was seen at SMEs, whereas cuts were made at large-scale producers, according to the survey.