Belfast Telegraph

Domestic fillip offset by export orders fall

By John-Paul Ford Rojas

Britain's manufacturing sector picked up to a four-month high in November as growth was propped up by domestic demand while export orders fell for a third month.

The sector posted a better-than-expected reading of 53.5 on the closely-watched CIPS/Markit purchasing managers' index survey - where the 50 figure separates growth from contraction.

Markit senior economist Rob Dobson said it showed "solid expansion" in the sector, as Chancellor George Osborne prepares to deliver his Autumn Statement. It was an improvement on the 53.3 reading the month before and comes after manufacturing appeared to be heading for stagnation after recording a 17-month low of 51.6 in September.

However, November's figures showed new export orders remained weak, posting another below-50 reading amid subdued global conditions and the strength of the pound against the euro.

In the UK, manufacturing is seeing weaker growth than in the first half of 2014 but November's figures mean it has now been expanding for 21 months in a row.

Domestic demand remained "the main pillar supporting the expansion", Mr Dobson said. The rate of job creation reached a four-month high and low inflation meant price pressures for raw materials remained subdued.

Mr Dobson added: "Despite easing from the stellar pace set in the first half of the year, growth is still coming from a broad base that will aid its sustainability."

Paul Hollingsworth of Capital Economics said: "Strong domestic demand is ensuring that the sector's recovery does not grind to a halt in response to weak overseas demand.

"Moreover, falls in oil prices should provide a timely fillip to growth."

Mike Rigby, head of manufacturing at Barclays, said: "Manufacturers are eagerly awaiting some good news from the Autumn statement and especially help in supporting and promoting overseas trade, and beyond the squeezed eurozone."

Belfast Telegraph

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