September’s seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index® fell slightly to 54.1, down from a two-and-half record reading in August of 55.2. The PMI has remained in the growth zone (above 50.0) for four successive months. Output increased as new work intakes grew from both domestic and export markets.
Output increased for the fourth consecutive month in September, although the growth rate eased slightly. Higher production was linked to improved inflows of new work, companies reopening and staff returning to work. Solid expansions were seen in the consumer, intermediate and investment goods sectors, with the strongest increase in the intermediate goods category. Large manufacturers saw the fastest growth and small-sized firms the slowest.
Underpinning the ongoing recovery in output volumes was a further increase in new order intakes, although below August’s near three-year high. New business rose for the third successive month, reflecting a combination of improving customer demand, rising export orders, signs of recovery in the retail sector and the reopening of schools. Export performance was boosted by international economic recovery, with new export business rising at a 21-month high rate.
Input cost inflation also accelerated, driven by higher raw material costs, rising competition for inputs and consequent supplier shortages. Vendor lead times also extended. UK manufacturers increased their selling prices to try to offset these factors.
Manufacturers continued to have a positive outlook for the year ahead, with 60% expecting output to be grow 12 months from now. The overall degree of confidence remained close to July’s 28-month high but a larger number of firms noted uncertainty regarding COVID-19 and Brexit.