Manufacturing survey reveals industry was on the mend before EU referendum

Jake Cordell
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Britain's fixers were getting fixed before the EU vote
Britain's fixers were getting fixed before the EU vote (Source: Getty)

Activity in the manufacturing sector was running at a five-month high in the days before the EU referendum, in a sign the industry could have started to turn a corner before the vote.

The closely-watched purchasing manufacturing index (PMI) showed activity came in at 52.1, up from 50.4 last month where scores above 50 indicate expansion, and the highest monthly reading since January.

Markit, which compiles the index, said the results showed a rapid increase in production and a "solid acceleration in inflows of new work", with new orders rising at their fastest pace since October 2015.

Despite the more positive outlook, job losses continued, with employment falling for the sixth straight month, and figures from the Office for National Statistics (ONS) show the industry is in decline.

"The latest PMI signalled that the manufacturing sector has started to move out of its early year sluggishness in the lead up to the UK's EU referendum," said Rob Dobson, senior economist at Markit.

"Whether this growth recovery can be sustained will depend heavily on whether the current financial and political volatility spills over to the real economy."

The future of the manufacturing industry - like many others - remains uncertain in the wake of the UK's vote to leave the EU, analysts have said. Much depends on whether the cheaper pound will spur exports enough to offset any of the other potential drags on the sector.

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