U.K. Manufacturing Expands as Imminent EU Exit Boosts Orders

(Bloomberg) -- U.K. manufacturing expanded at the fastest pace since 2017 as the recovery from Covid-19 disruptions was bolstered by firms bringing forward orders before the Brexit transition ends.

IHS Markit’s Purchasing Managers Index rose to 55.6 in November from 53.7 a month earlier, taking it further above the critical 50 mark that signals expansion. It beat a flash estimate published last month.

The reading indicates that Britain’s manufacturers are weathering the new round of virus restrictions far better than the dominant services sector. Though the overall economy is expected to contract this quarter, factories’ business optimism about the year ahead climbed to a six-year high.

Factories saw inflows of new work from overseas, in part boosted by European clients bringing forward purchases before Britain leaves the trading bloc at the end of the year. Consumer goods makers however continued to decline and job losses were recorded for the 10th consecutive month.

“Whether the upturn of manufacturing production can be sustained into the new year is therefore highly uncertain, especially once the temporary boosts from Brexit purchasing and stockbuilding wane,’’ said Rob Dobson, a director at Markit.

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