UK economy BOUNCE BACK: Manufacturing sector expands at fastest rate for over six years
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The IHS Markit/CIPS manufacturing purchasing manager’s index, or PMI, recorded a score of 55.2 in August. This score was up from the previous month, in July the index recorded 53.3. Any number above 50 is considered an expansion for the manufacturing sector.
IHS Markit director, Rob Dobson, stated: “The recovery of the UK manufacturing sector gathered pace in August.
“Output expanded at the fastest rate in over six years as new work intakes rose to the greatest extent since November 2017, led by an upturn in domestic demand and signs of recovering exports.
“Business optimism also remained encouragingly robust and close to July’s recent peak.
“However, companies report that the current bounce is mainly driven by the restarting of manufacturers’ operations and reopening of clients as COVID-19 restrictions continue to be relaxed.”
New order intakes for products have strengthened.
The UK’s domestic market was the main source of new orders.
However, export orders also increased moderately.
Manufacturers stated that they had seen a rise in demand from the EU, North America and Australia.
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The good news is dampened by the fact the industrial sector also recorded its seventh month of job losses.
Overall employment has declined in the manufacturing sector at its highest rate for 11 years.
The Pound is also seeing a huge rise in value that has come unexpected to analysts, as world currency traders turn their backs on the Dollar.
The Pound has reached its highest level since Christmas.
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Today Sterling rose by 0.6 percent against the dollar, making it worth $1.3444.
However, since the coronavirus became a pandemic global finances have tumbled some nations have been hit harder than others, particularly manufacturing.
Britain’s manufacturing sector has had to contend with both Brexit uncertainty and the coronavirus lockdown causing a recession.
Rolls Royce engines made in Bristol are facing renewed uncertainty as the aviation industry has been decimated by the prolonged coronavirus restrictions.
Industry analysts predict that it will be 2022 before the Britain’s industrial sector picks up again to pre-pandemic norms.
In the last recession the economy shrunk by 2.1 percent, the UK is now facing the prospect of the economy sinking by 20.4 percent.
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