UK PMIs: Manufacturing activity soars to decade high in March
UK manufacturing activity grew sharply in March as business optimism hit a seven-year high and vaccine rollouts buoyed the industry, according to new data.
The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index rose to 58.9 per cent last month, marking the highest reading in just over a decade.
The index leaped from last month’s 55.1 and outperformed a forecast of 57.9. Anything above 50 is seen as a sector in growth.
Hiring accelerates
British factories rode a wave of orders in March and prepared for a reopening of the economy by hiring staff at the fastest rate since 2014.
The UK’s swift vaccine rollout is expected to lead to an economic recovery this year after it slumped by nearly 10 per cent in 2020, its deepest contraction in around 300 years.
The PMI survey showed new orders rising at the second-fastest pace for more than three years as companies geared up for a lifting of restrictions.
Oliver Blackbourn, portfolio manager at Janus Henderson, said the UK is leading the economic recovery race across Europe.
“The UK is on a clear path to reopening all areas of activity as Europe tightens restrictions yet again to deal with another wave of infections.
“The UK has now delivered at least a first vaccine jab to over half the population, whereas Europe continues to lag in the mid-teens.”
Supply chain delays
The reading was flattered, however, by one of the sharpest increases in supply chain delays and logistics issues on record.
Sarah Banks, managing director of freight and logistics at Accenture Global said: “An impressive uptick in demand has led to a record surge in manufacturing output this month, which is certainly encouraging for economic recovery as a whole.
“However, reports of ongoing supply chain issues and shortages of materials have led to marked hikes in shipping costs, as manufacturers struggled to keep up with demand.”