British manufacturing growth picks up for second consecutive month, despite supply chain constraints. Data show

  • In November, manufacturers increased their output for 18 consecutive months 
  • The sector has been growing steadily for several months, but the pace of growth has slowed.
  • In October, Sector reversed the slowdown and continued to do so in November 

The UK’s manufacturing industry has seen growth increase for the second straight month, despite the squeeze on supply chain. This is according to new data.

An industry survey found that manufacturers increased output in November for the 18th straight month. The sector’s growth has been steady for several months but has been slowing down in recent years.

Only in October did the sector reverse its five-month slowdown in growth. This trend continued into last month. It has been now revealed. 

IHS Markit (and CIPS) assign the sector a score in a monthly survey called the Manufacturing Purchasing Managers’ Index (PMI). A sector that scores higher than 50 is considered to be growing.

Although it was at 58.1, it was compared with 57.8 last October and 57.1 September. However, this is still well below the score of 60.3 that was recorded in august.

Companies also reported improved new work intakes – especially from the domestic market.

There are significant sector pressures and strains to the supply chain that have caused shortages of components required by manufacturers to create their products.

So, the fastest increase in commodity and component prices since the PMI survey was started over three decades ago has been devastating.

Around three quarters of respondents to the survey said prices have risen, while less than one hundred claimed a decrease.

‘New orders flows exacerbated the problem in manufacturing capacity with the fastest intake for three months, and it was the domestic market that made up the majority of the new work,’ said Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS). 

“Export orders fell back as clients lost patience due to long lead times and port and shipping problems.

Rob Dobson from IHS Markit stated that while November saw some expansion rates and new orders gain some momentum, growth is still weaker than in the first half.

“Manufacturers now face challenging circumstances, including rising supply chain disruptions, staff shortfalls and inflationary pressures that stifle growth, while continuing difficulties due to Brexit and logistical problems restrict the opportunities to expand into international markets.

He said: “The current supply-side constraint, cost rises, skills shortages and rising labour demand will increase the expectation of an imminent interest rate hike by the central bank. However, the survey shows how industry is vulnerable to new headwinds such as the Omicron variation and the slow rate of export growth.