U.K. manufacturing expanded more than forecast in November and employment increased at the fastest pace in 2 1/2 years.
A gauge of factory activity increased to 58.4, the highest since February 2011, from a revised 56.5 in October, Markit Economics said in a report in London today. That compares with the median estimate of 56.1 of 30 economists. The index has been above the 50 level that divides expansion from contraction for eight straight months.
Britain’s economic growth accelerated to 0.8 percent in the third quarter, and the Bank of England raised its forecasts last month, with Governor Mark Carney saying the recovery has “taken hold.” Today’s report showed factory production and new-order growth were close to the highest in two decades, while job creation was at its strongest since May 2011.
“The U.K.’s recovery is mostly domestic, driven by very loose monetary policy and declining uncertainty,” said Rob Wood, an economist at Berenberg Bank in London. “Now the U.K.’s main export markets are starting to recover –- the euro zone and the U.S. -– trade flows should improve too.”
The pound extended its gain against the dollar after the report and was trading at $1.6409 as of 10:21 a.m. London time, up 0.3 percent since yesterday.
Export orders also continued to show growth, with improved demand from customers in Asia, the U.S., Germany and France, Markit said. A euro-area report today showed factory growth in the 17-nation region expanded faster than initially estimated last month.
In China, manufacturing growth exceeded economists’ estimates in November, with an index holding at 51.4, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. That was above the 51.1 median of 26 forecasts in a Bloomberg survey. A separate gauge from HSBC Holdings Plc and Markit today was 50.8, also beating forecasts.
Factory growth in the U.S. slowed last month, economists said before a report later today. The Institute for Supply Management’s manufacturing index fell to 55.1 from 56.4 in October, according to the median of 50 estimates.
In the U.K., while input costs increased the most in three months in November, producers were able to raise prices at the fastest pace in more than two years, Markit said. It added that the manufacturing outlook was “positive” in November as companies reduced stock levels, taking the orders-to-finished goods inventory ratio to a record high, suggesting that production growth will be maintained.