Factory output grows at fastest pace for more than four years as export demand picks up

BRITAIN’S factories increased their output at the fastest pace in more than four years as surging orders gave manufacturers a boost and pushed them to ramp up hiring again.

Export demand is particularly strong as the weak pound makes British goods competitive abroad, and order books have reached such a scale that backlogs grew in November for the first time in six months.

The purchasing managers’ index (PMI), compiled by IHS Markit, rose to 58.2 last month, the highest level since August 2013. Any score of above 50 indicates growth, so this move up from 56.6 in October shows an acceleration in the manufacturing sector. The output index hit 60.4, the new orders component rose to 60.9 and the employment part of the survey rose to 55.4 – indicating factories are taking on workers at the most rapid pace since June 2014.

This shows the UK’S manufacturers are not far behind those in the rapidly growing eurozone economies, where the sector’s PMI rose to 60.1. Demand from the eurozone is supporting the British economy, but domestic demand is robust, and orders also increased from the US, Middle East and Asia.

“On its current course, manufacturing production is rising at a quarterly rate approaching 2pc, providing a real boost,” said Rob Dobson, director at IHS Markit. “The breadth of the rebound is also positive.”