The Purchasing Managers Index for manufacturing hit a 16 year high in April, according to Markit/CIPS.
The seasonally adjusted PMI rose to 58.0 in April, from an upwardly revised figure of 57.3 in March. It has now signalled an improvement in operating conditions in each of the past seven months.
Manufacturing production increased for the eleventh month running in April, with the rate of expansion only slightly below March’s fifteen-and-a-half year high. Underpinning the latest rise in output was the sharpest growth in total new business since January 2004 and a series record increase in new export orders. The forward-looking new orders to inventories ratio also stayed at an elevated level, suggesting production will continue to rise at a rapid pace in coming months.
However, suppliers’ lead-times lengthened to the greatest extent for almost fifteen-and-a-half years in April, as suppliers faced logistical problems in meeting the strongest monthly increase in purchasing of inputs since October 1994.
And subsequently, average input prices rose at the fastest rate since August 2008. Price rises were reported for a wide variety of inputs including chemicals, feedstocks, food products, freight, fuel, metals, oil, paper, petroleum, polymers and timber.
Manufacturers passed on part of the rise in their costs to clients in the form of higher selling prices in April. Output prices rose for the sixth month running and at the fastest rate since October 2008.
David Noble, chief executive at the Chartered Institute of Purchasing & Supply, said: “This performance of the UK manufacturing sector is hugely encouraging as it is proving surprisingly resilient. It is now growing at a rate of knots – maintaining the momentum gained in Q1 and faring much better than we could have dared hope for this time last year.