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PMI: UK manufacturing recovers from October dip
Once again, the UK manufacturing industry shows strength and resilience, recovering from October’s disappointing data and taking a positive view of the way ahead. The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index for November shows improvement on the drastic dip in October, posting a stronger 53.1 figure, compared to October’s 51.1.
Some good news
Business is up compared to the disappointing drop in October, and the industry remains in growth mode, with continued confidence for the year ahead.
New business up
Output increased in November and there was a rise in new orders, although the domestic market provided more business than exports, given the uncertain political climate. New product launches and building stock were credited as the reasons for the lift in new business.
Exports falling in response to uncertainty
New export business fell for the second month in a row amid Brexit and trade war concerns. Conversely, the consumer goods sector saw an increase in new exports.
Tony Piggott, head of corporate development at currency specialist, Halo Financial, said: “While the more positive figure this month has failed to boost the Pound, it’s encouraging to see continued resilience in the face of economic and political uncertainty. Export markets are flatter as the world waits for the outcomes of multiple negotiations, most importantly for the UK, Brexit; and also US-China, NAFTA and other ongoing trade discussions that have an impact on exports.
“However, new trading relationships are being forged and opportunities found amidst the uncertainty. Demand remains for quality British products overseas, with research earlier this year suggesting international shoppers are 68% more likely to buy products made in Britain, and the “Made in Britain” influencing 95% of shoppers’ purchasing decisions.”
Dorrien Peters, head of manufacturing at Irwin Mitchell, added: “Although this latest survey highlights a welcome boost in terms of new business, it is disappointing to see that exports figures are down again.
“It is perhaps not too surprising. UK manufacturers still don’t know what type of Brexit they will be dealing with and therefore many issues such as market access, tariffs, regulation, supply chains and access to labour, remain unresolved.
“At this stage, we don’t know the answer, but whatever happens over the next month or so, there’ll certainly be further changes for businesses, particularly those that trade overseas.”
Business confidence remains
Atul Kariya, manufacturing sector lead and partner at MHA MacIntyre Hudson, concluded: “UK manufacturers, while remaining upbeat about the future of the industry, are taking every step to protect their businesses from the unknowns of Brexit, in particular, exploring the Plan B scenarios.
“Companies are planning new product launches, marketing strategies and spend, machinery investment and expansion, while reinforcing their existing and potential international trading relationships.
“Solid contingency plans and evolving corporate strategies are playing a vital role in business growth and survival during times of turbulence, with a flurry of activity taking place now to secure a strong future.”