The UK manufacturing sector expanded at the fastest pace in four months in August driven by new orders, amid broad based expansion across all product categories.
The IHS Markit/CIPS Purchasing Managers' Index rose unexpectedly to 56.9 in August from 55.3 in July, survey data from IHS Markit and the Chartered Institute of Procurement & Supply showed Friday.
This was the second-highest PMI score in over three years. The score was forecast to fall to 55.0 from July's initially estimated value of 55.1.
Production advanced at the steepest pace in seven months in August, driven by faster intakes of new work received. Although the domestic market was the prime source of new contract wins, the trend in export business remained robust.
The strong performance in manufacturing filtered through the labor market. Job creation was recorded for the thirteenth straight month, with the rate of increase the quickest since June 2014.
Purchase price inflation accelerated for the first time in seven months in August. Nonetheless, the rate remained well below the record high seen at the start of 2017. At the same time, manufacturers' selling prices rose at a solid, yet slower, pace.
Further, data showed that business optimism improved to a three-month high driven by rising demand, new product launches, efforts to improve market share, stronger global economy and planned investment spending.
"The survey data suggest that the manufacturing economy remains in good health despite Brexit uncertainty, and should help support on-going growth in the economy in the third quarter, which will add fuel to hawkish policymakers' calls for higher interest rates," Rob Dobson, director at IHS Markit, said.
The broad-based strength of August's manufacturing PMI survey adds weight to the assessment that the sector will put the disappointing first half to the year behind it, and will probably provide a decent boost to GDP growth in the second half of the year, Andrew Wishart, an economist at Capital Economics, said.
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May 15, 2026 15:25 ET Apart from the confirmation of Kevin Warsh as the next Fed chair, the main news on the economics front this week included key price data from the U.S. and the first quarter economic growth figures from major economies. Both consumer prices and producer costs have started to reflect the effect of supply shocks due to the Middle East conflict. In Europe, GDP data was in focus, while inflation data from China dominated the news flow in Asia.