LONDON (Reuters) - The fastest growth in export orders in more than two years helped British manufacturing grow solidly last month, a survey showed on Friday, in a sign that the country’s economic recovery may be gaining a broader base.
Britain’s manufacturing sector has grown strongly in recent months, but it remains around 9 percent smaller than before the financial crisis, unlike the services sector which has now recovered the ground it lost in the 2008-09 recession.
Data company Markit said its October manufacturing purchasing managers’ index edged slightly lower to 56.0 from a downwardly revised 56.3 in September, but remained close to August’s two-year peak of 57.1.
Index readings above 50 indicate expansion, and Markit economist Rob Dobson said the survey pointed to British manufacturers outperforming their foreign peers, enjoying quarterly growth of 1.0-1.5 percent.
“Despite only accounting for less than 11 percent of the economy, the current strength of growth being seen in manufacturing means the sector will still provide a major boost to the economy in October,” Dobson said.
Britain’s economy grew by 0.8 percent in the three months to September, its strongest performance in over three years, helped by a 0.9 percent expansion in the manufacturing sector.
However, earlier this week Bank of England Governor Mark Carney said growth was still largely reliant on consumer demand and rising house prices, and said he hoped that new businesses would get better access to finance as the recovery strengthened.
Britain’s government and the BoE have also been banking on improved demand for exports to help growth - and Friday’s data showed some sign of this.
The PMI sub-index for export orders rose to 56.5 from 53.6, its highest level since February 2011, with broad-based improvements in demand from Asia, the United States, mainland Europe, the Middle East and Russia.
“The UK is no longer being left behind in the chase to benefit from improving global markets. A strengthening domestic market, riding on the crest of a wave from recent positive economic news, also remains a prime driver of the recovery,” Dobson said.
The news was less rosy for job seekers, with the pace of hiring falling to its lowest since June. Inflation pressures eased marginally, with increases in raw material costs and factory-gate prices slowing slightly, though they remain rapid by the standards of the past two years.
Reporting by David Milliken; Editing by Hugh Lawson