Broad-based UK recovery continues to accelerate in Q4

The UK saw accelerating growth in both the construction and manufacturing sectors in November 2013, according to the latest Purchasing Managers’ Indices from Markit/CIPS, while the services sector continued to show strong expansion.

The headline index for manufacturers reached 58.4 in November, its highest reading since February 2011; any figure above 50.0 indicates expansion. The construction sector saw an even greater upswing with a headline reading of 62.6 – the fastest recorded growth since August 2007. Meanwhile, the PMI result for the services sector came in at 60.0. This is a marginal slowdown from October’s figure but indicates continued robust growth, in line with PMI readings seen over July to September.

Increases in business activity in November were supported by rapid growth in new orders. This was particularly pronounced in the manufacturing sector, where new orders rose at their fastest rate since 1994, mainly boosted by domestic demand.

This month’s results also indicate notable job creation, as manufacturers added staff at the fastest rate since May 2011. Service sector firms continued to increase employment at a steady pace, with many taking on more workers to service current demand levels, although some firms noted that employment was increased in anticipation of future rises in activity.

Overall, the latest PMI figures point to a further acceleration of UK growth in Q4 2013. Putting the results together, the composite PMI for the UK recorded 61.0 on average for the first two months of the quarter, up from an average of 60.3 in Q3. This puts growth prospects on solid foundations moving into the next year.