–Employment Growth At Highest Level Since Survey Start In 1992
–CIPS Warns On Emerging Bottlenecks As Recovery Gets Going

LONDON (MNI) – UK manufacturing activity saw its fastest rate of
growth since September 1994 last month, according to the Markit/CIPS
survey.

The manufacturing PMI stood at 58.0 in November, up from a revised
55.4 (54.9). The outturn was well above analysts’ forecasts.

Markit/CIPS reported faster growth in output, new orders and record
job creation, but also widespread cost pressures due to rising raw
material prices.

Employment saw its fastest growth since the survey started in 1992,
reflecting stronger growth in output and faster inflows of new work
and new export orders, Markit/CIPS said.

The PMI has been above the neutral 50.0 mark for sixteen months
running.

Rob Dobson, Senior Economist at Markit and author of the UK
Manufacturing PMI said that the record rate of employment growth was
the highlight of this survey:

“The UK PMI surged to a sixteen-year high in November, confounding
the consensus forecast of weaker growth. The stand-out number was the
survey record increase in employment, raising hopes that job creation in
manufacturing can play a wider role in broadening and sustaining the
economic recovery. Output and new order inflows also picked up sharply,
and exports rose at a solid clip after a mid-year lull, priming
manufacturing and overseas trade to be pillars of Q4 GDP growth.

“This is welcome news, as the rebalancing of the economy away from
consumption towards exports represents a key part of the coalition’s
growth strategy, and comes at a time when stronger manufacturing
expansion may well be needed to offset a likely slowdown in consumer
spending as austerity measures start to bite.”

David Noble, Chief Executive Officer at the Chartered Institute of
Purchasing & Supply also welcomed the good news but also warned on
emerging bottlenecks as the sector recovers so rapidly:

“The pickup in export markets continues to expand as customers look
to replenish their inventories, building on the momentum gained last
month and a step along the way to realigning the UK economy.

“Whilst this is good news for manufacturers at the end of what has
been a rollercoaster year, the next few months will be far from an easy
ride. Persistent cash flow pressure has led to falls in suppliers’ stock
over time – compounding disruption in supply chains and resulting in
longer delivery times. Increased purchasing activity is also adding to
input cost inflation, which is likely to continue rising for the
foreseeable future.”

–London newsroom: +44 207 862 7491; email: ukeditorial@marketnews.com

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