UK manufacturing output expanded for the first time in a year during October, as companies depleted backlogs of work, increased stocks and, in some cases, were boosted by a restarting of production at JLR following a recent cyberattack.
The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) rose to a 12-month high of 49.7 in October, up from 46.2 in September.
Three of the PMI constituents (new orders, employment and stocks of purchases) registered contractions, while sub-indices for output and suppliers' delivery times were at levels consistent with improved operating conditions.
Sector data signalled that production volumes rose in the consumer and intermediate goods industries.
Market conditions faced by manufacturers remained tough, however, with demand from both domestic and overseas markets decreasing during the latest survey month.
Although business optimism climbed to an eight-month high, it remained below its long-run average.
Employment contracted for the twelfth consecutive month in October, as the impact of subdued demand and earlier labour cost increases (namely higher minimum wages and employer NICs) continued to drive job losses.
Although October continued to see manufacturers report operating in a high-cost environment, there were further signs that purchase price inflationary pressure is easing.
Supply chains remained stretched in October, reflecting supplier capacity issues, shipping difficulties and port disruption. This was despite a further decrease in purchasing activity among manufacturers.