UK manufacturing grew at fastest rate in 27 YEARS last month as stunning Covid bounceback gathered pace
- PMI figures show the manufacturing sector growing at fastest pace since 1994
- Level for April underlines strong recovery under way after the coronavirus hit
- Anything over 50 on closely-watched index represents sector that is expanding
- Bank of England is expected to upgrade its growth forecasts for UK this week
UK manufacturing grew at the fastest rate in nearly 27 years last month as the coronavirus bounceback gathered pace.
The closely-watched IHS Markit/CIPS PMI hit 60.9 in April – with anything above 50 representing expansion.
That was above the 58.9 recorded in March, and the highest seen since a score of 61 in July 1994.
The positive findings from the monthly survey comes amid expectations that the Bank of England will upgrade its growth forecasts this week.
Chancellor Rishi Sunak has insisted that the UK is well-placed for a strong recovery, with consumers who have stayed in jobs during the pandemic sitting on billions of pounds of enforced savings.
Manufacturing managers said they have seen output growth due to the loosening of restrictions, improved demand and rising backlogs of work.
It means the UK sector has seen growth for 11 months in a row.
The closely-followed IHS Markit/CIPS PMI index hit 60.9 in April – with anything above 50 representing expansion
Chancellor Rishi Sunak (pictured on a visit to the Quorn Foods plant in North Yorkshire last week) has insisted that the UK is well-placed for a strong recovery
Consumer goods manufacturers performed strongest as retailers, pubs, restaurants and the leisure sector increased orders following the reopening of parts of the economy.
Improved global conditions also contributed, with international orders growing too, although this was weak in comparison with domestic business.
Larger manufacturers benefited most from international orders compared to smaller sized firms, suggesting the complexities around post-Brexit ordering are being resolved at the biggest businesses.
The outlook for the sector remained positive with two thirds of respondents believing output will be higher in a year’s time.
Only 4 per cent believe the sector will contract, leaving overall confidence at a seven-year high.
But there were signs that inflation is also on the rise, with average selling prices rising at the fastest pace since records started in November 1999, the survey found.
Supply chain delays and input shortages contributed – and some said demand outstripping supply also contributed to higher prices being charged.
Rob Dobson, director at IHS Markit, which compiles the survey, said: ‘Further loosening of Covid-19 restrictions at home and abroad led to another marked growth spurt at UK factories.
‘The outlook for the sector is also increasingly positive, with two thirds of manufacturers expecting output to be higher in one year’s time.’
But he warned: ‘The sector also remains beset by supply-chain issues and rising inflationary pressures.
‘Disruption following Brexit and Covid-19, especially at ports, caused a further near-record lengthening of supplier delivery times.
‘The resulting input shortages kept producer price inflation among the highest over the past four years.
‘Manufacturers have generally passed on these costs to customers, as highlighted by a survey-record rise in selling prices, but it is hoped that this inflationary backdrop will subside once supply and demand come back into line as Covid-related logistic delays ease.’
The positive findings from the monthly survey comes amid expectations that the Bank of England (governor Andrew Bailey pictured) will upgrade its growth forecasts this week