UK manufacturing growth surged to a new record high in May as Covid restrictions eased, according to a survey released on Tuesday.
The IHS Markit CIPS manufacturing purchasing managers’ index rose to 65.6 from 60.9 in April. Although this was a little weaker than the flash estimate of 66.1, it was above July 1994’s previous record high of 61.0.
A level below 50.0 signals contraction, while a level above indicates expansion.
Markit’s new orders index jumped to 68.1 in May from 61.9 in April, hitting the highest level since the survey began in 1992.
Looser pandemic restrictions and high levels of pent-up demand meant the rapid revival in labour market conditions continued, with staffing levels also rising at a record pace, the survey found.
Rob Dobson, director at IHS Markit, said: “The UK PMI surged to an unprecedented high in May, as record growth of new orders and employment supported one of the steepest increases in production volumes in the near 30-year survey history.
“Growth is being boosted by the unlocking of economies from Covid restrictions and ongoing vaccination programs. This is being felt across the globe, as highlighted by a record rise in new export business during the latest survey month.
“The corollaries of this strong upsurge in industrial activity are increased strain on supply chains and a build-up of price pressures. Supplies of inputs into manufacturers and finished goods on to clients are both being severely disrupted by raw material shortages, port issues, Covid restrictions, post-Brexit difficulties and market forces as demand outstrips supply. Suppliers’ delivery times subsequently lengthened to one of the greatest extents on record, while input costs and selling prices both rose at unprecedented rates. With little sign of supply pressures receding, these price rises will become more visible to consumers.”