–CIPS/Markit Say Manuf Output Grew 2% In 3 Months To April
–See Big Contribution To Q2 GDP From Manufacturing
–Output, Exports, Employment All Show Strong Gains In Survey

LONDON (MNI) – The Markit/CIPS UK Manufacturing PMI hits its
highest level in over 15 years in April.

The index rose to 58.0 from 57.3 in March, with gains in the output
and new orders readings being especially marked. CIPS/Markit said that
the survey suggested that manufacturing would make a big contribution to
Q2 GDP.

Growth of new exports also hit a series record, Markit/CIPS said,
while employment growth reached a three-year high as order book
backlogs showed a rise for the first time in the survey’s history.

Rob Dobson, Senior Economist at Markit said:

“Manufacturers reported a flying start to the second quarter, with
the weak pound boosting export growth to the fastest for at least 15
years. The data point to manufacturing output growing by as much as 2%
in the latest three months, suggesting the sector will provide a strong
contribution to second quarter gross domestic product”.

“The sheer strength of the rebound in demand for manufactured goods
is highlighted by an unprecedented increase in backlogs of work, the
largest for at least 11 years, which in turn has encouraged
manufacturers to raise staffing levels to the greatest extent for three
years”.

“The feeding-though of rapid output growth to job creation is
particularly good news, and bodes well for the sustainability of the UK
economic recovery.”

Commenting on the report, David Noble, Chief Executive Officer at
the Chartered Institute of Purchasing & Supply, said:

“This performance of the UK manufacturing sector is hugely
encouraging as it is proving surprisingly resilient. It is now growing
at a rate of knots – maintaining the momentum gained in Q1 and faring
much better than we could have dared hope for this time last year.

“Positively, purchasing managers reported growth across all
sub-sectors and in companies of all sizes. What’s more – given that
stock levels are still relatively low, this is a trend we anticipate
seeing for some time to come as firms work to try and meet increasing
sales demand.

“The real turning point will come when manufacturers feel confident
enough to increase their investment and start to build capacity again.
The good news is there are already signs this is starting to happen as
employment levels are slowly rising on the back of strained capacity and
backlogs of work reported for the first time in over a decade.”

Global Insight Chief UK Economist Howard Archer described the
data as encouraging

“Manufacturers are currently clearly benefiting from a pick up in
demand both at home and overseas, improved competitiveness in both
domestic and foreign markets stemming from the weak pound, and leaner
stock levels”.

Archer continued: “The key question is though can manufacturers
sustain healthy growth over the medium term, particularly as stimulative
measures are withdrawn? Indeed, the car scrappage scheme came to an end
in March”.

Archer said that there was little chance that these strong data
would alter expectations that the Bank of England would do anything but
leave Bank Rate at 0.5% following the meeting of the Monetary Policy
Committee on Monday May 10.

–London newsroom: + 44 207 862 7492; email: ukeditorial@marketnews.com

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