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TOP NEWS: UK Manufacturing Sector Recovery Continues In August

Tue, 1st Sep 2020 09:51

(Alliance News) - UK manufacturing sector activity continued to improve in August with businesses restarting operations as lockdown measures eased, IHS Markit said on Tuesday.

The seasonally adjusted IHS Markit/CIPS purchasing managers' manufacturing index rose to a 30-month high of 55.2 in August, up from 53.3 in July, but slightly below the earlier flash estimate of 55.3.

The PMI score has posted above the neutral 50.0 mark for three consecutive months, Markit noted.

Markit said August saw UK manufacturing output expand at the fastest rate for over six years, as companies and their clients restarted operations following coronavirus lockdowns.

In addition, Markit said manufacturing production rose at the fastest pace since May 2014, reflecting solid expansions across the consumer, intermediate and investment goods sub-sectors.

Rob Dobson, director at Markit, said: "The recovery of the UK manufacturing sector gathered pace in August. Output expanded at the fastest rate in over six years as new work intakes rose to the greatest extent since November 2017, led by an upturn in domestic demand and signs of recovering exports. Business optimism also remained encouragingly robust and close to July's recent peak.

"However, companies report that the current bounce is mainly driven by the restarting of manufacturers' operations and reopening of clients as Covid-19 restrictions continue to be relaxed. Backlogs of work fell at an increased rate, hinting at spare capacity, and the labour market remains worryingly weak, with job losses registered for the seventh straight month. The downturn in employment may have further to run as the government's furlough scheme is phased out unless demand rises sharply."

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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