UK manufacturing growth hits seven-month high spurring jobs creation

Lucy Harley-McKeown
·2 min read
Growth of output and new orders were both among the best seen over the past seven years, leading to a solid increase in employment, according to latest data. Photo: Getty
Growth of output and new orders were both among the best seen over the past seven years, leading to a solid increase in employment, according to latest data. Photo: Getty

UK manufacturing activity has continued its upward trajectory in April, seeing a further acceleration of expansion in the UK manufacturing sector. 

The closely-watched index showed that growth of output and new orders were both among the best seen over the past seven years, leading to a solid increase in employment. 

The sector remained beset by supply-chain delays and input shortages, however, which contributed to increased purchasing costs and record selling price inflation, Markit said. 

The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) measures the performance of the manufacturing sector, drawing from a survey of 600 industrial companies.

It rose to 60.9 in April, up from 58.9 in March and above the earlier flash estimate of 60.7. 

A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month; below 50 represents a contraction; while 50 indicates no change.

Preliminary PMIs released at the end of April also showed activity is rebounding rapidly across the economy. Private sector activity grew at the fastest rate since 2013 in April, IHS Markit said, with all part of the economy growing rapidly.

In April, companies reported improved new work intakes from several trading partners, including mainland Europe, the US, China and South-East Asia. 

Large-sized manufacturers saw a substantial expansion in new export order intakes, compared to only a marginal rise at small-sized firms.

"The outlook for the sector is also increasingly positive, with two-thirds of manufacturers expecting output to be higher in one year’s time. Export growth remains relatively subdued, however, as small manufacturers struggle to export," said Rob Dobson, director at IHS Markit.

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“The sector also remains beset by supply-chain issues and rising inflationary pressures," Dobson continued, noting that disruption following Brexit and COVID-19, especially at ports, caused a further near-record lengthening of supplier delivery times. 

"The resulting input shortages kept producer price inflation among the highest over the past four years. Manufacturers have generally passed on these costs to customers, as highlighted by a survey-record rise in selling prices, but it is hoped that this inflationary backdrop will subside once supply and demand come back into line as covid-related logistic delays ease.”

The increase follows historically positive numbers for March, when it rebounded to its highest level in a decade thanks to a COVID reopening-driven boom. The index scored 58.9 — a 121-month high and ahead of forecasts.

March's figures signalled a remarkable turnaround for the sector after a Brexit-driven slump over Christmas.

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