The UK's manufacturing outlook for output and new orders has hit a 1994 high, as output and new orders expand sharply, according to new data from Markit.
While analysts had expected a jump from 54.8 (revised up from 54.6) to 55.0, the survey smashed expectations, rising to 57.2. That main index a two and a half year high.
Any number above 50 implies an expansion, and the UK's manufacturing sector is now roaring.
Howard Archer, chief UK and European economist, IHS Global Insight:
This is a hugely encouraging survey, which extends the recent stream of good news on the UK economy.
The August purchasing mangers’ survey shows manufacturing activity expanding for a fifth successive month, and at the fastest rate since February 2011.
The only black spot in the survey is that input costs spiked up in August, partly due to higher oil prices. which pressurized companies margins.
Robert Wood, chief UK economist, Berenberg:
Up, up and away, this is a consumer led recovery with legs. The improving export picture coming through in the latest surveys is the icing on the cake. Driven by super loose monetary policy and a sense of relief that the worst is now over, domestic momentum is just getting stronger and stronger which may be worrying some BoE policy-makers given Mark Carney’s super-dovish rhetoric. Still, the BoE will continue to support the recovery by waiting too long before raising rates rather than undermining the upturn.
Rob Dobson, senior economist at survey compilers Markit:
The sector continues to build on the solid 0.7% expansion registered during the second quarter, and growth could easily break the 1.0% mark in the third quarter. Manufacturing is clearly making a strong positive contribution to the economy, providing welcome evidence that the long-awaited rebalancing of the economy towards manufacturing and exports is at last starting to take place now that our export markets are recovering.