The latest CIPS UK Manufacturing Purchasing Managers’ Index has revealed that despite a slight dip in October the sector maintained a solid rate of expansion, with an uplift in output across all sectors, particularly intermediate goods, and an increase in new orders and employment.
Mike Thornton Head of Manufacturing at RSM, said:
'The data shows a familiar story to last month with upturns in output, new orders and employment. The watch word, however, is purchase price inflation, which has risen to a 69-month high on the back of a weak pound.
‘The exchange rate has pushed up import costs for commodities such as energy and metal, as well as raising the price of imported pork products for food manufacturers.
‘As a nation, the UK is 56 per cent self-sufficient in pig meat and relies on significant imports, predominantly from Denmark, Germany, Ireland and the Netherlands. Over time, we will see if these increased input costs are passed on to UK shoppers.
‘On the upside, manufacturers are also taking advantage of the weak pound to increase their export business, and this latest report reveals new orders coming from the USA, the EU and China.
‘The manufacturing landscape is constantly changing and the recent weaker pound means manufacturing firms need to be vigilant to control their costs, and ultimately cash, through robust controls around debtors, creditors and the amount of money they have tied up in stock and raw materials’.