New PMI Figures Highlight Strong Performance By British Manufacturers In December 2013

Britain's manufacturers continued to mount a recovery in December 2013, new figures have shown.

The latest Purchasing Managers' Index (PMI) published by Markit and the Chartered Institute of Purchasing and Supply (CIPS) recorded an overall score of 57.3 during the month.

While this was down from the 33-month-highs achieved in November, it is still an impressive reading. All scores above 50 represent growth.

The last few years have been difficult for Britain's manufacturers - particularly for smaller, less established companies - but Markit's senior economist Rob Dobson believes the industry is well placed to make a sustained recovery.

Although production levels are still nine per cent lower than the peaks reached prior to the financial crisis, he predicted total output growth of more than one per cent in the final quarter of 2013. This upturn has helped to create between 10,000 and 15,000 jobs in the UK.

"Output and new orders are rising across all manufacturing sub-sectors and also at small and medium enterprises and large-scale producers," Mr Dobson commented.

Meanwhile, David Noble, chief executive officer at the CIPS, added the average PMI score of 57.2 for the fourth quarter of 2013 as a whole was the best overall performance since the first three months of 2011.

"The sector's broad based expansion was underpinned by strong domestic demand and improved export orders, all of which are signs of an underlying trend of continuing growth going into the new year," he remarked.

Brazil, China, Ireland, Russia and the US proved to be important markets for British exporters towards the end of 2013, while the eurozone also showed signs of a recovery.

A separate PMI report published by Markit suggested manufacturing in the euro area reached a 31-month high in December, with the Netherlands, Germany, Ireland, Italy and Austria faring particularly well.

This, according to Markit chief economist Chris Williamson, bodes well for the wider economy.

With European firms reporting an upturn in new orders, exports and backlogs of work, manufacturers have started 2014 on a solid footing.

Expert Opinion

The New Year has got off to a positive start with these figures, with the PMI once again demonstrating that the economy is continuing to shift in the right direction and the UK’s small businesses have played no minor part in this. <br/> <br/>"All of this points towards further good news being likely over the coming months, which is why it is important for businesses of all sizes to ensure they have access to the right type of effective and comprehensive support in order to thrive. Growth is of course hugely positive, but it can inevitably bring new challenges for entrepreneurs and businesses owners to deal with. <br/> <br/>"Having access to high quality legal advice is a fundamental part of this and we would urge businesses to make sure they are fully prepared for the future by assessing their support network as soon as possible." Fergal Dowling - Partner