April Manufacturing PMI rises to fifteen-and-a-half year peak

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. Growth of output and new orders both remained broad-based by product category and company size, a positive development for the sustainability of the recovery. The rate of expansion in output was strongest in the intermediate goods sector. Manufacturing employment increased for the third time in the past four months in April, and at the fastest rate since February 2007. This followed the sustained period of job cutting seen throughout much of 2008 and 2009. Rob Dobson, senior economist at Markit said, "Manufacturers reported a flying start to the second quarter, with the weak pound boosting export growth to the fastest for at least 15 years. The data point to manufacturing output growing by, as much as, 2 per cent in the latest three months, suggesting the sector will provide a strong contribution to second quarter gross domestic product." "The sheer strength of the rebound in demand for manufactured goods is highlighted by an unprecedented increase in backlogs of work, the largest for at least 11 years, which in turn has encouraged manufacturers to raise staffing levels to the greatest extent for three years." "The feeding-though of rapid output growth to job creation is particularly good news, and bodes well for the sustainability of the UK economic recovery."