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Factories see new orders rise at fastest rate since 1994
THE UK's factories are “booming again” after the sector experienced its strongest growth in more than two years, with orders at their highest for nearly 20 years.
The industry has seen new orders and output rise at their fastest rate since 1994, with a fifth consecutive month of expansion generated by a positive domestic market and increases in overseas work.
The figures, revealed in the latest Markit/CIPS purchasing managers' index, show the sector lifted to a high of 57.2 in August, up from a revised reading of 54.8 in July.
Any reading above 50 indicates growth in the sector, and August's figure is the highest since February 2011.
The survey also revealed companies were creating more jobs for the fourth consecutive month, with many filling positions in production, research and management posts.
The results come as factories across Europe saw orders rise at their fastest rate since May 2011, and China's manufacturing sector hit a 16-month high, allaying worries of a slowdown in its economy.
Rob Dobson, Markit senior economist, said the results showed the UK's manufacturing sector was growing, and said companies had benefited from product launches and rising customer confidence, with stronger demand for exports to the US, China, India and Brazil.
He said: “The UK's factories are booming again.
“Orders and output are growing at their fastest rates for almost 20 years, as rising demand from domestic customers is being accompanies by a return to growth of our largest trading partner, the Eurozone.”
However, Mr Dobson revealed the survey found manufacturers were still facing pressures from inflation, with average input prices rising at their fastest rate for two years, and average selling prices rising slowly.
He said: “Manufacturing is clearly making a strong and positive contribution to the economy, providing welcome evidence that the long-awaited re-balancing of the economy towards manufacturing and exports is at last starting to take place and that our export markets are recovering.
“The broader picture shows greater emphasis on job creation, thanks to the new Bank of England guidance, and while the latest results show output is increasingly positive, employee numbers only crept up slightly, as companies squeezed extra output from existing resources.
“At the same time, the rate of input cost inflation surged upwards on the back of rising oil and related prices.”
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