UK manufacturing industry soars on job creation
The rapidly expanding UK manufacturing industry enjoyed further gains in November, led by the strongest pace of job growth in two-and-a-half years.
Markit Group’s gauge of manufacturing activity rose 1.9 percentage points to 58.4, the highest level since February 2011. The monthly indicator exceeded 56.1, the median estimate of economists surveyed by Bloomberg.
Substantial gains in production and new orders helped propel the manufacturing industry forward last month, with the domestic market remaining the primary engine for growth. Rising export orders from Asia, the United States, Germany and the Middle East contributed to the broad recovery, as post-production inventories fell at the one of the sharpest levels in over three years.
Increased business activity created a stronger impetus for hiring, as employers increased payroll to meet elevated demand. Job creation was positive for the seventh consecutive month, as employers increased their intake across all manufacturing sub-sectors. Job growth was consistent across small, medium and large enterprises.
“The manufacturing expansion remains broad-based by sector, demand from the domestic market continues to surge higher and new export orders are rising at a clip close to October’s 32-month high,” said Rob Dobson of Markit Group. “Manufacturing and the wider economy are therefore both on course to build on the third quarter’s solid foundation.”
Compared to the euro region, the UK’s manufacturing industry is accelerating at a much more rapid pace. Manufacturers are increasingly optimistic about business prospects, due in large part to improving macroeconomic conditions. The British economy expanded 0.8 percent in the third quarter, and is expected to grow 2.4 percent next year, according to the Organisation for Economic Cooperation and Development.
Strong manufacturing data helped the British pound soar to a 27-month high in the European session, surpassing the 1.64 US barrier. The GBPUSD pair has since consolidated in the mid-1.63 region after US PMI beat forecasts.
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