Manufacturing boosted by domestic demand despite weak exports

Domestic demand boosts manufacturing activity in the UK despite weak exports to Eurozone.

Further indications of the UK’s strengthening recovery were found in Markit’s recent Purchasing Manager’s Index (PMI). It showed that manufacturing activity in the UK continued to expand, hitting a four-month high of 53.5 in November.

The reading remains above the crucial 50 mark, which indicates the sector is maintaining growth. However, the sector is a little more subdued than earlier in the year, when data showed the manufacturing activity undergoing a rapid expansion.

Alongside solid performances in output, new orders and employment, local business helped to support the uptick in activity as exports fell. In addition, new work was driven by favourable domestic market conditions, solid promotional activity, and new clients.

“The news on the domestic front was especially positive, with solid new order inflows from the UK market the main pillar supporting the expansion,” said Rob Dobson, senior economist at survey compiler Markit.

The strong ongoing recovery in manufacturing also helped to boost the labour market: the rate of job creation reached a four-month high, and manufacturing employment continued its nineteen month run of increases.

Small to medium-sized enterprises saw the sharpest increases in employment, while large-sized firms enjoyed modest gains in headcounts.