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British factories were at their busiest in more than four years in November, boosted by new orders from home and abroad and the fall in the value of sterling.
The IHS Markit purchasing managers’ index rose to 58.2 from 56.6 in October, its highest reading since August 2013. A reading of above 50 in the survey indicates growth.
The survey tallies with the official manufacturing data, which has found sharp increases in the production of computers, machinery and other electrical goods during the past year as global capital expenditure steps up a gear after a decade of disappointing growth following the financial crisis.
Rob Dobson, director at IHS Markit, said the survey indicated the sector was growing at a quarterly rate of 2 per cent, providing a significant boost to overall growth.
“Of real note was a surge in demand for UK investment goods, such as plant and machinery, with new orders for these products rising to the greatest extent for two decades,” he said. “This suggests that capital spending, especially in the domestic market, is showing signs of renewed vigour.”
A PMI survey of the services sector is due to be published on Tuesday.
Economists have feared that the UK manufacturing sector, while currently enjoying the competitive benefits of devaluation and stronger demand from abroad, would not invest for the future as they would fear the loss of access to the UK’s biggest export market after Brexit.
Ben Broadbent, deputy governor of the Bank of England, has said the sector is in a temporary sweet spot enjoying the benefits of devaluation before the UK exits the EU.