UK manufacturing enjoys boost to exports

Further evidence of unexpectedly strong momentum in the private sector arrived yesterday with the publication of the latest survey of business confidence in manufacturing.

The Chartered Institute of Purchasing and Supply's October poll of its managers at the sharp end of industry shows the first improvement in sentiment since May, with across the board amelioration in new orders and employment prospects. Exports showed an especially robust recovery from the previous month, moving more firmly into expansionary territory. This comes despite a recent strengthening in sterling and worries about a new contraction in world trade as "currency wars" start to be waged across the world.

Overall, the index moved from a reading of 53.5 to 54.9. The survey is a reliable leading indicator: any reading above 50 indicates an increase in actual output in around six to nine months.

Although only an early and very partial indicator – manufacturing accounts for just 13 per cent of the economy – it suggests that the faster than forecast growth figures seen in the second and third quarters of this year may be repeated in the last months of the year.

The bullish report makes it less likely that the Bank of England's Monetary Policy Committee will announce a further round of quantitative easing, the direct injection of cash to boost the economy, when it makes its announcement on Thursday.

An upbeat David Noble, chief executive officer at the Cips, said: "Exports are very much the engine of growth within manufacturing at the moment. Whilst it is very positive to see the sector expanding strongly again, it's difficult to predict the impact of fluctuations in export markets so the recovery may continue to be bumpy. What is clear is that manufacturing looks set to drive further GDP growth in the fourth quarter."

Last week's data on third-quarter growth from the Office for National Statistics showed that manufacturing had enjoyed its best 12-month period since 1994, with an annualised growth rate of 4 per cent, and the Cips stressed yesterday that the index of sentiment has remained above the neutral 50 mark for 15 successive months.

The rate of job creation picked up sharply in October. Employment rose at the fastest rate since June, reflecting improved demand and increases to sales and support staff.

However, in "big picture" terms, and despite the optimism of those working in it, manufacturing output is still 10 per cent below it peak in the first quarter of 2008. It has lost 2.2 million jobs, or 26 per cent of the total, during the recession, and, given its now small contribution to the national product, it is of less significance than trends in the service sector, which have been less encouraging.

Joost Beaumont, an economist at ABN Amro, added: "The manufacturing sector will remain solid, although we expect that the pace of expansion will slow somewhat. The positive impact from restocking is likely to fade, while global growth eases as well."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Property
pets
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk