Manufacturing sector continues recovery in September but growth eases

Car manufacturing
Car manufacturing - (Copyright PA Archive)
10:28am, Thu 01 Oct 2020
CBAD8A00-D2B9-4E0E-ADDF-D0366C357A34 Created with sketchtool. E9A4AA46-7DC3-48B8-9CE2-D75274FB8967 Created with sketchtool. 65CCAE04-4748-4D0F-8696-A91D8EB3E7DC Created with sketchtool.

The UK manufacturing sector continued its recovery last month but “lost some bounce” as the rate of growth eased slightly, according to new figures.

The closely-followed IHS Markit/CIPS manufacturing purchasing managers’ index (PMI) recorded a score of 54.1 for September, from August’s two-and-a-half year high of 55.2.

Anything above 50 is considered an expansion in the sector.

The reading came in just below analyst expectations, with a consensus of economists predicting a score of 54.3 for the month.

Rob Dobson, director at IHS Markit, said: “September saw UK manufacturing continue its recovery from the steep Covid-19 induced downturn.

“Although rates of expansion in output and new orders lost some of the bounce experienced in August, they remained solid and above the survey’s long-run averages.”

The report revealed the sector has been in expansion for four successive months, representing its longest period of growth since the start of 2019.

Output growth in September was linked to improving levels of new work, companies reopening and increased numbers of staff returning to work.

New business rose for the third successive month on the back of improving customer demand and rising export orders.

However, job losses were also reported for the eight consecutive month as it nears to the end of the Government furlough scheme.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “The impetus behind this resurgence lies in the release of delayed projects and more people returning to work, but the employment picture overall darkened significantly.

“Some firms continued to make use of the furlough scheme to retain their workforce, but larger numbers of redundancies this month means we have a wretched end to the third quarter as job numbers fell for the eighth month in a row.

“In spite of these difficulties, the sector’s glass remained half-full, and optimism for the year ahead was sustained.”

Sign up to our newsletter