It’s all good news for U.K. manufacturing following the latest numbers to come out of the Purchasing Manager’s Index (PMI). Bloomberg’s BusinessWeek notes, “A Purchasing Managers’ Index advanced to 57.3 from 55.8 in March, Markit Economics said in a statement in London today. The median estimate of 32 economists in a Bloomberg News survey was for a reading of 55.4. A level above 50 indicates expansion.”The data reflect a surge in exports and product launches that put the United Kingdom at a 20-year high for manufacturing. Job growth throughout the sector also influenced the PMI boost, as well as the overall outlook for the British economy.
According to Market Watch, “The data imply a healthy start to activity in the second quarter of the year, just two days after the Office for National Statistics said the gross domestic product grew 0.8% compared with the final three months of 2013, according to preliminary calculations. The breakdown of the output components available showed that industrial production–which includes manufacturing output–grew 0.8% on the quarter in the first three months of this year.”
In addition to the latest in manufacturing, the strength of both the pound and sterling increased, which a welcome change for British exporters.
A report by the Telegraph states, “The pound climbed close to a five-year high after the data were released. Sterling rose against the dollar to $1.6921, the highest since early August 2009 as markets bet that the strength of the U.K. recovery will force the Bank of England to raise interest rates sooner than expected.”
While analysts are convinced the latest data signals an overall boost in the British economy, it’s important to note that the start of the month can always skew the numbers slightly. Even still, economists believe the surge is noteworthy.
According to Reuters, “The combination of market holidays and the start of a new month meant Europe’s money market rates, which underpin the cost of loans to consumers and firms, but also impact the euro, remained high despite a flood of extra cash this week.”