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Manufacturing activity at 15-year high

Jeegar Kakkad February 01, 2010 10:38

Another day, another set of data suggesting that UK manufacturing is starting to shake off the worst of the recession.

And that's good news because without exports, there's little else in the economy that's going to give the wider recovery the spark it needs.

This morning, the CIPS/Markit UK Manufacturing Purchasing Managers' Index put manufacturing activity at 56.7 - a 15 year high. Anything above 50 on the index indicates growth, the higher the number, the stronger the growth.

The survey showed that growth was fairly broad based. New orders were the strongest in six years because of both domestic and export demand.

And even the employment index managed to squeak above 50.

The one (small) red-flag in the report was on the cost side. The strong global manufacturing recovery - especially in China, which posted a record PMI for January - and the weak sterling are pushing up costs of imported raw materials. that means manufacturers are likely to keep one eye on inflation and continued cost control.

 

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Rebalancing

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