News

UK factories expand at fastest rate in 8 months

The British manufacturing sector grew at the fastest rate in 8 months in March, and have expanded for 24 consecutive months.

According to the Telegraph, the expansion was driven by a rise in new business and weak inflation.

Markit Economics said its Purchasing Managers’ Index (PMI) rose to 54.4 in March, the highest in 7 months, from a revised 53.1 in January.

According to Markit the figures suggested that output in Britain’s manufacturing sector grew by 0.6 per cent in the first three months of 215 compared with the previous quarter, up from 0.2 per cent in the last 3 months of last year; as reported by the Mail online.

Rob Dobson, Economist at Markit, said:

“The sector is on course for output growth ranging around 0.6pc over the opening quarter as a whole, a positive contribution to broader economic expansion and its best performance since the first half of last year”.

New export orders grew at the fastest rate since August after contracting in February, which was underpinned by rising volumes of new business from domestic based clients, according to Markit. Input prices continued to fall rapidly due to the steep decline in oil prices. British exporters also reported a rise in orders from across the world including the USA, China and the Middle East.

However, Samuel Tombs at Capital Economics said it “is unlikely to be the beginning of a major rebalancing of the economy”, as growth in investments and exports are still significantly outweighed by the surge in consumer spending, which remains one of the main drivers of UK growth.

Sources:

Tom Beardsworth, http://www.bloomberg.com/
Reuters, http://www.dailymail.co.uk/
Mehreen Khan, The Daily Telegraph,