The manufacturing sector’s recovery continued through October, albeit at a lower rate of growth than September, according to a survey that took place before the announcement of a second lockdown.
The UK Manufacturing Purchasing Managers’ Index (PMI) for October shows that output and new orders rose for a fifth successive month - extending the sector’s longest period of expansion since early 2019. However, the index score fell slightly compared to September.
The growth in October reflected improved intakes of new work and manufacturers catching up on orders that were delayed during the first lockdown earlier this year. New export business also grew by its greatest monthly extent for over two years, strengthened in part by stock building activities from clients in Europe ahead of the end of the EU Transition Period.
October’s expansion was led by the intermediate and investment goods industries, with the consumer goods sector slipping back into contraction for the first time since recovery began. The consumer goods sector also saw the highest levels of job losses during the month.
Nevertheless, manufacturers maintained a positive outlook, with over 60% of companies expecting output to rise over the coming year. Only 10 per cent of companies forecasted a decline, although the survey took place before the announcement of a second lockdown in England.
Commenting on the findings, Make UK Senior Economist, James Brougham, said:
“While the data remains in positive territory, it’s at the lowest level since the easing of the first national lockdown. While the recently announced month-long extension to the Job Retention Scheme will put the brakes on the rate of job losses, manufacturers will experience a foreboding déjà vu as they face the exceptional operational challenges induced by another national lockdown. It’s clear that this crisis has many months to run at the very least.”