India’s manufacturing activity expanded at the fastest pace in more than a year in August, led by solid rises in output and new orders, survey results from Markit Economics showed Thursday. IHS Markit’s growth data showed that Britain’s factories recorded activity of 53.3 in August, the highest level in 10-months and a huge acceleration from July’s reading, when the sector slipped into contraction, falling at its sharpest level since 2009.
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Purchasing managers’ expectations for business conditions were the most optimistic in about a year, with the index measuring expected business conditions in six months’ time rising to 61.5 index points from 55.4 previously.
“Companies reported that work that had been postponed during July had now been restarted, as manufacturers and their clients started to regain a sense of returning to business as usual”, Markit economist Rob Dobson said.
New order volumes also moved closer to stabilization. Survey compiler IHS Markit said that input price inflation surged to a five-year high, with nearly 44% of firms reporting an increase in purchasing costs.
Howard Archer, chief European and United Kingdom economist at IHS Global Insight, said August’s PMI still points towards a struggling construction sector.
A separate survey from YouGov and the Centre for Economics and Business Research showed British business confidence staged a partial recovery from the plunge that followed the European Union vote, although firms remained downbeat about the economic outlook.
Reports from survey respondents suggested that Brexit uncertainty continued to act as a brake on the construction sector during August, especially in terms of house building and commercial work.
Despite another month of reduced output, the latest figures can be viewed as welcome news overall after a challenging summer for the construction sector.
The construction figures come a day after manufacturing PMI data that was much better than expected, and raised hopes that the economy would avoid a Brexit-driven recession.
A reading over 50 implies expansion, while one below 50 suggests a contraction.
The resurgence was driven by a rebound in manufacturing output and incoming orders, with new business seeing an upturn in the United Kingdom and overseas.
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While manufacturing in six of the eight economies covered by the survey expanded, with Germany and the Netherlands leading the way, the overall index was dragged lower by a continued downturn in France and Italy’s first contraction since January a year ago.
