UK manufacturing growth beats forecasts, hits 3-year high in April

British manufacturing PMI rose sharply in April aided by weaker pound. Data released earlier today showed Markit/CIPS UK Manufacturing Purchasing Managers' Index (PMI) rose to 57.3 from 54.2 in March, beating forecasts which had pointed to a slight decline to 54.0. The headline index hit its highest level since April 2014 and well above its long-term average of 51.6.

Upbeat data added to signs that factories are enjoying at least a temporary boost ahead of Brexit from the weak pound. The rise has narrowed the divergence that had opened up between the manufacturing PMI and firmer readings from other business surveys including that of the CBI Industrial Trends survey in recent months.

"The weak sterling exchange rate helped manufacturers take full advantage of the recent signs of revival in the global economy, and especially the eurozone, which is enjoying its best growth spell for six years," said Rob Dobson, senior economist at PMI compiler IHS Markit.

Both export and domestic order growth accelerated in April. The rise in output centered on investment goods, while output of consumer goods recovered in April, following March’s softening. Producers continued to boost output prices in response to previous increases in costs.

UK’s growth outlook still remains primarily driven by the dominant services sector, data for which is due on Thursday. Analysts expect a further rise in the services PMI following March’s gain.