Outlook for UK manufacturing remains strong but input costs are accelerating

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The IHS Markit/CIPS UK Manufacturing PMI for October increased to 56.3 – up from 56.0 in September.

Duncan Johnston, UK manufacturing industry leader at Deloitte, comments on the report:

“The sustained strength in Manufacturing PMI in line with the optimism reported in other industry surveys has been encouraging news for the sector. We’re now also seeing this reflected in economic output: last week’s GDP estimate suggests that manufacturing has now returned to growth.

“Today’s survey also shows that input prices continue to rise swiftly and the concern is this will feed through to higher prices for customers and end consumers. Reduced investment appetite risks hindering productivity growth in the sector. Last week’s CBI Industrial Trends Survey highlighted that investment intentions have waned, while the EEF have found that investment in plant and machinery has dropped.

“It is uncertain whether concerns will be eased over the coming months but manufacturing companies will be eagerly anticipating this month’s Budget. Industry associations have been urging for measures that help boost business investment and support growth.”