Stephen Cooper, head of manufacturing at KPMG UK, comments on the Markit/CIPS UK Manufacturing PMI figures published yesterday (1 December 2016).
He said: “Although UK manufacturing growth felt a slight chill in November, the Christmas bells are ringing for a positive end to the year as the sector looks set to contribute to economic growth for the fourth quarter.
“As expected, the exchange rate continues to support UK competitiveness, both globally and domestically, with increased demand being seen from the US, Middle East and mainland Europe.
“Importantly for the UK, employment has risen for the fourth month in a row, however, the downside this month is a continued rise in the cost of inputs. Average purchase price rose at one of the fastest rates in survey history, and whilst some of this was passed on at the factory gate, manufacturers also bore some of the brunt. Given that the order book growth has dropped markedly since September, these higher costs may offset the positive effects of the exchange rate. In this climate of great uncertainty, manufacturers must, as always, keep a tight control of their cost base.
“Globally, the picture looks positive as well with the Eurozone, US and Japan all posting positive results. Overall, Christmas seems to have come early for global manufacturing.”
