UK manufacturing has beaten economist predictions, as Markit's purchasing manager's index (PMI) has risen from 51.5 (revised from 51.3) to 52.5, exceeding a forecasted rise to 51.5.
Rob Dobson, senior economist at survey compilers Markit:
The UK manufacturing sector made positive strides on the recovery path during the second quarter of the year. June saw output and new order growth hit rates not seen since early-2011, as a brightening domestic market and resilient overseas demand led to a broad-based expansion across the sector.
The near-term outlook for output also remains on the upside, as above-trend sales growth depleted inventories that manufacturers will need to rebuild later in the year. Job creation is still weaker than hoped for, but this should improve if solid demand growth is sustained and eats into spare capacity.
Jeremy Cook, chief economist at the foreign exchange company, World First:
This is the highest reading for the UK manufacturing PMI in 2 years and is the 3rd consecutive announcement that has beat analyst’s expectations. Sterling and gilts are higher after the announcement which is a nice welcoming present for the new Bank of England Governor, Mark Carney, on his first day in the job.
Samuel Tombs, UK economist at Capital Economics:
Today’s UK data add to evidence that the underlying pace of the economic recovery is strengthening, albeit moderately.
... output balance edged up from 54.7 to 55.0. At this level the balance is consistent on the basis of past form with quarterly growth in manufacturing output of about 1%. For now, then, it seems as if the UK’s recovery is gathering some steam.
Howard Archer, chief UK and European economist at IHS Global Insight:
The improved manufacturing PMI for June reinforces belief that the Bank of England is most likely to sit tight on Quantitative Easing or any other stimulative action at Mark Carney’s first MPC meeting this week. We still think more QE will eventually occur, with a £25 billion dosage possible in August. This reflects our belief that Mark Carney is likely to be keen to build up escape velocity from extended economic weakness.