At 55.3 in August, up from 53.3 in July, the seasonally adjusted IHS Markit/CIPS Flash UK Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – posted above the crucial 50.0 no-change threshold for the third month running. 

Moreover, the latest PMI reading signalled the fastest improvement in overall business conditions since February 2018. Strong expansions of production volumes and incoming new work were the main factors boosting the headline index during August.

Manufacturing output increased at the steepest pace since April 2014, which highlighted a continued recovery from the low point seen in the second quarter of 2020. Goods producers noted that easing lockdown measures had led to a restart of their supply chains and efforts by customers to replenish inventories. 

Despite reporting another month of improving demand, the latest data indicated a steep and accelerated fall in employment. Moreover, business optimism eased slightly since July as some manufacturers began to cite worries about the sustainability of the recovery over the longer term.