The rate of improvement in U.K. manufacturing conditions picked up in July after two consecutive months of decline as new export orders surged by the most since April 2010, IHS Markit said Aug. 1.
The IHS Markit/CIPS purchasing managers' index for July stood at 55.1, up from the revised three-month low of 54.2 in June, as a result of new work inflows, higher production levels, increased job creation, longer supplier delivery times and an uptick in inventory holdings.
Foreign demand grew at the second-strongest rate in the history of the index. Still, the pace of expansion in new orders was among the slowest recorded over the past year.
Price pressures eased further in July with input prices rising at the slowest pace in over a year.
"U.K. manufacturing started the third quarter on a solid footing. The headline PMI signaled a growth acceleration for the first time in three months during July, as new order intakes were boosted by a near survey-record increase in new export business.
"Although the exchange rate remains a key driver of export growth, manufacturers also benefited from stronger economic growth in key markets in the euro area, North America and Asia-Pacific regions," said Rob Dobson, senior economist at IHS Markit.
Almost 49% of the manufacturers surveyed by IHS Markit said that they expect higher production in one year.