LONDON: British manufacturing surged unexpectedly last month as domestic strength helped factories overcome the worst fall in export orders since January 2013, caused by sagging demand from the eurozone.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) rose to 53.2 from 51.5 to touch its highest level since July, topping even the most optimistic of forecasts in a poll and well above the 50 mark denoting expansion.
It stood in stark contrast to the eurozone. While German manufacturing achieved modest growth last month, manufacturing activity in France and Italy — the second- and third-biggest eurozone economies — shrank.
Britain still looks on track to outpace other advanced economies this year, but the pace of the recovery has eased slightly over the last few months as European demand fades.
“Solid demand in the US and loose UK financial and monetary conditions, at present, appear to be just about offsetting the impact ... of the weakness of demand in the eurozone,” said Dominic Bryant, economist at BNP Paribas.
Consumer and intermediate goods drove the upturn in manufacturing last month, said Markit.
The total new orders index rose from September’s 17-month low to its highest level since July.
Sterling rose to its strongest level in a month against the euro following the data, while the premium that British government bonds offer over equivalent German debt hit its highest level in four weeks. Reuters
