Falling Pound Exchange Rate Sees UK Manufacturing Expand Exports to China, USA and the EU

A weaker Pound Sterling has helped UK manufacturers increase business levels despite uncertainty surrounding Brexit.

The November release of October’s Markit/CIPS UK Manufacturing PMI read at 54.3, below expectations for 54.5.

However, the previous month’s reading was revised higher to an impressive 55.5.

The data is strong with Markit pointing out that the fall in the value of the Pound has helped the sector maintain a “solid rate of expansion”.

The improvement in operating conditions were driven by a marked expansions of new business and production.

New order volumes increased for the third consecutive month and at a pace close to September’s recent high.

Companies reported higher demand from both domestic and export clients.

Markit report that a major feature of the latest survey was the effect of the depreciation of the sterling exchange rate.

Manufacturers reported that this aided efforts to increase inflows of new export business, resulting in new orders from the USA, the EU and China.

However, the weaker exchange rate has also had a negative impact on import prices owing to higher import prices and in the costs of products based on dollar-denominated commodities such as oil.

Of the companies offering a reason for an increase in average purchasing costs, around 90% made some reference to the sterling exchange rate.

Nevertheless, “SMEs showed the biggest appetite for employing more staff as the overall employment index showed a rise for the third consecutive month. Production and warehouse staff, plus apprentices fared the best for employment opportunities,” says David Noble, CEO at the CIPS.