Oct 05, 2016
Recording a positive growth in the month of September, U.K. manufacturing activities are said to have been put at an advantage despite the uncertainty that the Brexit vote brought with it.
According to a recent survey, September was the month with the highest growth for manufacturing companies in the last two years.
The degradation of the value of the pound, stemming from the Brexit vote proved to be the sector’s “prime growth engine” last month due to the increase in demand witnessed in both domestic and international consumption.
The surveyors stated that the scope of the survey was broad and that employment in the industry rose for a second month in a row as companies hired new employees to cope up with the higher demand.
According to the Markit/CIPS manufacturing Purchasing Managers' Index (PMI) rose to 55.4 in September when compared to 52.1 in August.
Further, the increase of the PMI level following Brexit was said to be “sufficient to make the third quarter average of 52.3 the best during the year-to-date.”
Senior economist at Markit, Rob Dobson, stated that “strong” PMI reading pointed towards the growth of U.K.’s manufacturing sector in the third quarter and reduced the chances of U.K. facing a predicted recession.
Reports quoted Dobson as adding, “The weak sterling exchange rate remained the prime growth engine, driving higher new orders from Asia, Europe, the U.S.A. and a number of emerging markets. The domestic market is also still supportive of growth, especially for consumer goods. Further step-ups in growth of new business and output in the investment goods sector may also be a sign that capital spending is recovering from its early year lull, in the short term at least."
In another survey, Eurozone Manufacturing stated that private sector activity soared in the month of September.
Lee Hopley, chief economist at EEF stated, “While U.K. exporters have the added boost from the weaker exchange rate, it’s the prospect of brighter demand prospects that provides confidence that growth will hold up.”
Source: Big News Network.com