- James Knightley, Research Analyst at ING
Factory activity in the UK surprisingly improved, surging to a 16-month high in the tenth month of the year, spreading optimism over the British economic outlook. A report of market research group Markit revealed that the UK manufacturing PMI jumped up from September's reading of 51.8 to a seasonally adjusted 55.5 in October. This figure indicates that the sector has been growing as any reading above the threshold of 50 points represents an increase in manufacturing activity, whereas one below the threshold implies the industry's contraction. Economists had forecasted the index to move down to 51.3 last month. According to the survey, the gain of 3.7 point in the PMI level was one of the sharpest booked over the near 24-year survey history.
The rates of growth in output and new orders accelerated in October, being in both cases the steepest since the middle of 2014. New export order advanced for the second month in a row as demand rose from clients in the Middle East, East Asia and the US. The sector's level of employment stepped up for the 30th consecutive month in October, as improved new orders intakes and attempts to clear backlogs of works prompted companies to increase capacity.
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