According to the report from IHS Markit/CIPS, the recovery in the UK manufacturing sector continued at the start of the final quarter, as output and new orders rose again supported by improved demand from both domestic and overseas sources. That said, the upturn showed further signs of losing impetus, as the initial boost to growth from the economy reopening faded and job losses accelerated. 

The seasonally adjusted IHS Markit/CIPS PMI fell to 53.7 in October, down from 54.1 in September but above the earlier flash estimate of 53.3. The PMI has remained at an above-50.0 level, signalling expansion, for five months running.

Manufacturing output rose at an above survey-average rate in October, despite growth easing to a four-month low. The latest expansion reflected improved intakes of new work and companies catching up on orders delayed during lockdown. The trend in new export business meanwhile strengthened, reflecting increased demand from China and the US and a temporary boost from Brexit stock building by clients in Europe.

Sector data highlighted a growing disparity between the performances of the main product categories covered by the survey. The intermediate and investment goods industries both saw marked expansions of production and new order volumes in October. In contrast, the consumer goods sector slipped back into contraction, with output and new business falling for the first time since the onset of their respective recoveries.

Manufacturers maintained a positive outlook in October. Over 60% of companies expect output to rise over the coming year, compared to only 10% forecasting a decline. Positive sentiment reflected hopes of economic recovery and a reduction in COVID-19 disruption. However, some firms also raised concerns about the potential impact of both the ongoing pandemic and Brexit uncertainty.