British manufacturing may be ‘turning a corner’ after months of decline.
In a boost for the economy, a monthly health check of factories showed the downturn eased significantly last month.
S&P Global said its index of activity across the sector rose from 44.8 in October to 47.2 in November.
That was still below the 50 dividing line between contraction and growth but it was the third rise in a row and the strongest score since April.
‘November saw the UK manufacturing sector potentially turning a corner,’ the report said.
Boost: A report predicted that one million cars will roll off British production lines this year – well above earlier forecasts
A separate report predicted that one million cars will roll off British production lines this year – well above earlier forecasts. The Society of Motor Manufacturers and Traders (SMMT) previously expected 860,000 cars to be produced in the UK in 2023.
But after a round of investment in the sector, it revised its forecasts.
The latest projection is 18 per cent higher than the output in 2022, the worst year for UK car production since 1956.
But it still lags the 1.5m or more cars produced pre-pandemic.
It came as the SMMT said 91,512 cars left UK factories in October – up 32 per cent on the same month last year and the best performance since 2019.
SMMT chief executive Mike Hawes said: ‘These figures, coming on the back of a series of significant investment announcements, signpost a bright 2024 for the UK automotive sector. Government and industry are committing billions to transform the industry for a decarbonised future.’
And in a further boost for the economy, mortgage lender Nationwide said house prices unexpectedly rose 0.2 per cent in November after a 0.9 per cent increase in October.
The rally came after the Bank of England paused its series of interest rate hikes, having raised them from a record low of 0.1 per cent to a 15-year high of 5.25 per cent.
‘There has been a significant change in market expectations for the future path of Bank rate in recent months which, if sustained, could provide much needed support for housing market activity,’ said Robert Gardner, chief economist at Nationwide.
Despite signs of life across the economy, S&P warned that manufacturers ‘remained on a cautious footing with ongoing market uncertainty and the need to control costs leading to job losses, stock depletion and lower purchasing’.
And Martin Beck, chief economic adviser to the EY ITEM Club, pointed out manufacturers continue to face a significant obstacle to demand posed by uncertainty stemming from geopolitical tensions.
He added that manufacturing faces the same sluggish outlook likely to face the wider economy in the near term.
But business confidence improved in November ‘reflecting expectations that new product launches, economic recovery and a stabilisation of market conditions would support future output growth’, the report said.
