According to a new survey, a surge in export orders helped to lift manufacturing activity in July. The Markit/CIPS UK manufacturing purchasing index rose to 55.1 last month, up from 54.2 in June with figures above 50 indicating expansion within the index.
The closely-watched survey found that export orders rose in July at the fastest rate since April 2010 and at the second highest rate since the survey began. Markit revealed that the weaker pound remained the key driver of export growth. The UK pound rose to a ten month high against the US dollar after the report was published. The index results found the first growth in three months, yet Economists have warned that the figures may not necessarily boost a wider UK growth.
Director at Markit, Rob Dobson said “Although the exchange rate remains a key driver of export growth, manufacturers also benefitted from stronger economic growth in key markets in the euro area, North America and Asia-Pacific regions.”
Dobson continued “If this trend of milder price pressures is also reflected in other areas of the UK economy, this should provide the Bank of England sufficient leeway to maintain its current supportive stance until the medium-term outlook for economic growth becomes less uncertain.”
With Brexit looming, we think that the growth shown by UK manufacturing businesses is welcome news.