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UK manufacturing limps towards recovery

Written by Josh Russell on Monday, 03 September 2012. Posted in Growth, Finance

Given how important manufacturing is to the UK, any little fluctuation can have a huge impact. Which is why it’s great news that figures for August show it’s in far ruder health than previously estimated

UK manufacturing limps towards recovery

It’s become evident just how important British manufacture is to digging our country out of recession. Which is why the rates of contraction we have been seeing in the manufacturing industry in recent months has been such a worrying trend. Well according to figures released today onshore manufacturing may have turned a corner – the Purchasing Managers Index (PMI) has jumped to a four-month high, showing manufacturing in Britain is almost out of contraction and back into positive growth.

The last few months have been an exceedingly worrying time for onshore manufacturers. In the light of July’s steep decline, some improvement had been predicted by economists but was estimated only to be of the order of 46.1. By comparison its leap to 49.5 is a shock to the system – albeit an incredibly pleasant one – and puts British manufacture close to the figure of 50 which would signify the transition from contraction to growth.

Calculated from a survey of the nation’s purchasing managers on whether they are seeing an increase in orders, the PMI is an effective way to monitor the amount of demand placed on the manufacturing industry. Recent increases seem to have been in part affected by an increase in domestic orders from customers within the UK, demonstrating more small- to medium-sized enterprises are seeking to onshore their manufacturing, with consumer goods receiving the largest rate of expansion. In addition the rate of contraction for export orders has lessened, although orders to the EU are still struggling.

This is undeniably great news for the UK. With decreased faith in our financial industries, British enterprise needs a need focus and it seems manufacturing is slowly becoming more resilient to the economic fluctuations. Long may this new confidence last.

About the Author

Josh Russell

Josh Russell

Our former editor, Russell was the man in charge of properly apostrophising our publication and ensuring Oxford commas are mercilessly excised. Our former digital doyen, he’s also a Photoshop pro, a dab hand with InDesign and the man to go to if you need a four-hour soliloquy about the UK's best silicon startups.

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