According to the Markit/CIPS Purchasing Managers Index (PMI) the activity in the UK’s manufacturing industry hit a two and a half year high in December 2016. A PMI figure of around 50 indicates expansion and the sector rose from 53.6 to 56.1 last month. The survey also found that the weakened Sterling has helped to boost orders from overseas and the sector is starting the year with ‘strong footing.’
Economist at IHS Markit, Rob Dobson said “The UK Manufacturing sector starts 2017 on a strong footing. Based on its historical relationship against official manufacturing output data, the survey is signalling a quarterly pace of growth approaching 1.5%, a surprisingly robust pace given the lacklustre start to the year and the uncertainty surrounding the EU Referendum.”
December’s headline PMI reading was a 30-month high and the survey conducted by Markit/CIPS indicated that rates of growth for production and new orders last month were the best for over two and a half years.
The pound fell sharply against other currencies last year following the UK’s vote to leave the EU which has made UK goods cheaper for buyers from overseas, however many manufacturers in the UK have experienced higher costs for imported goods.Many analysts expect that these rising costs will lead to higher prices for consumers throughout 2017, pushing up the rate of inflation.
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