UK manufacturing sector gains momentum in October

Growth in the UK manufacturing sector gained momentum in October, data released on Monday showed.

The Markit manufacturing purchasing managers’ index rose from an upwardly revised 51.8 in September to a 16-month high of 55.5 last month, exceeding analysts’ expectations for a 51.3 reading.

The 3.7 point increase was one of the steepest registered during the 24-year survey history, Markit added.

“The revival provides a tentative suggestion that the manufacturers are pulling out of their recent funk, having been dogged by recession since the start of the year, and may help boost economic growth in the fourth quarter,” said Markit’s senior economist Rob Dobson.

The survey reported a strong improvement in output and new orders, with both sectors registering the sharpest gain since the middle of 2014, while back-to-back increases in new exports businesses were registered for the first time since the third quarter of last year.

Manufacturing employment increased for the 13th consecutive month, as improved new order intakes and efforts to clear backlogs of work prompted firms to increase their workforce.

“Perhaps we have become too downbeat on this aspect of the economy based on previous disappointments,” said Brenda Kelly, head analyst at London Capital Group.

“New orders and output accelerated in October and with price pressure remaining latent we may finally be seeing the upside of deflation.”