The rate of manufacturing output increased to a two-month high in November.
Data collated through the IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) revealed improvement in the business conditions in the sector.
After the 27-month low of 51.1 recorded in October, the rate of manufacturing output rallied in November and was recorded at 53.1.
It means that manufacturing output is further away from the 50.0 no-change figure that means activity has neither increased nor decreased.
However, despite the upturn, the PMI recorded suggests that the rate of manufacturing output is lacklustre and is some way off the times during the year when activity was greater; indeed, Markit’s data suggests November’s is still amongst the weakest level of manufacturing activity recorded in the last two-and-a-half years.
The chief reason for the slight upturn in November was the number of new orders recorded, which rose once again after the decline in October.
It was the domestic market which drove the majority of new contract wins, across the consumer, intermediate and investment goods sub-industries.
In terms of optimism for the next year, the picture is very much mixed; 46% believe that output will be higher in a year’s time, while less than 10% believe there will be contraction.
Reasons given for optimism by respondents included new product launches, investment in new machinery, planned business expansions and new marketing strategies.
However, the degree of optimism is still at its lowest level for 27 months, with concerns such as Brexit, exchange rate and the slowing economy all hitting confidence.
Companies recorded a greater need for staff in November than the previous month; the mild rebound in manufacturing employment was attributed to increased activity, new product launches and preparations for future demand.
For both the intermediate and investment good sub-sectors, employment increased.
However, it fell in the consumer goods producers sector.