English regions pick up pace

News Article - 19 October 2010
Category: Business

The UK's regional purchasing managers' index (PMI), researched by Markit, revealed positive growth for all nine English regions in September. Growth in all areas occurred at a faster rate than in August, when the market experienced a 14 month low.

Markit's PMI considers a range of metrics including employment, demand, output, work-in-hand and input/output prices to produce a single figure indicator of industry health. The survey is sponsored by the Regional Development Agencies.

Broken down by region, London continued its recovery after a slight contraction in August. The North West experienced the fastest rate of growth with a PMI of 54.6 against a base level of 50, which indicates no change has occurred. The North East and Humber also fared extremely well at 54.5 and 54.4 respectively. All other regions were no more than two index points out, making September's PMI the closest group of readings since the survey was introduced in 1997.

The picture of employment was less positive with limited growth in six of the nine English regions, although employment did experience an increase collectively. The North East fared the best for employment growth, up to 52.7 from 51.6 the month before, and also saw the best growth for new work coming in. Three major regions - the East Midlands, North West and West Midlands - lost staff in September. Factory gate prices also increased across all nine regions but the rate was slower than in previous months.

Whilst this suggests a positive short-term future for UK manufacturing companies, industry experts are divided on whether the latest PMI figures show a temporary sector boost ahead of the New Year tax increases or whether they are the beginnings of sustainable and robust economic recovery.

All manufacturing firms must avoid complacency, particularly with the upcoming VAT increase and the Government's austerity measures. Tightening up internal operations will benefit all manufacturing firms, particularly as market conditions continue to squeeze profit margins.

Access business software can help: production control and works order management allows firms to run unlimited profitability reports at any time to see where process improvement or pricing negotiations are required. The data derived from these reports can lead to positive behavioural change that can directly benefit the bottom line. 

For more information, please call Access on 0845 345 3300.

Article keywords: purchasing managers’ index, PMI, Markit, Regional Development Agencies, UK manufacturing companies, manufacturing firms, VAT increase, Access business software, production control and works order management

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