Weak pound, strong manufacturers: UK manufacturing PMI hits its highest since June 2014

Emma Haslett
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Bombardier Train Production Line
Manufacturers have benefitted from a weak pound (Source: Getty)

UK manufacturers are having a ball, it seems, after a closely-watched survey hit its highest since June 2014.

Markit's UK manufacturing PMI rose to 55.4 in September, up from 53.4 in August. Any figure above 50 denotes growth.

Markit said the rebound in sentiment since the EU referendum was "sufficient to make the third-quarter average (52.3) the best during the year to date".

The news came as the pound plunged to its lowest in weeks against both the dollar and the euro (although the FTSE 100 rose to its highest since June) - but that seems to be a good thing for manufacturers: any higher materials costs have been more than made up for by a new-found enthusiasm for all things British.

"The weak sterling exchange rate remained the prime growth engine, driving higher new orders from Asia, Europe, the USA and a number of emerging markets," said Rob Dobson, IHS Markit's senior economist.

"The domestic market is also still supportive of growth, especially for consumer goods. Further step-ups in growth of new business and output in the investment goods sector may also be a sign that capital spending is recovering from its early year lull, in the short term at least."

Meanwhile, others could barely contain their pride.

“British manufacturers have used their agility and experience to build momentum during a period of uncertainty, growing their order books in a time when others have put expansion plans on hold," added Dave Atkinson, head of manufacturing at Lloyds Bank Commercial Banking.

The industry has recognised that the export benefits of a weakened pound will not last forever, and manufacturers are actively exploring new market opportunities for British products both at home and overseas.

Meanwhile, the Eurozone's manufacturing sector posted an "encouragingly solid" performance in September.