The UK manufacturing sector picked up pace unexpectedly in November and output price inflation rose within a whisker of September’s record high, a survey showed.

The Chartered Institute of Purchasing and Supply/NTC said its purchasing managers’ index rose to 54.4 in November, well above the 50 divide between growth and contraction, from a downwardly revised 52.8 in October. Analysts had forecast a fall to 52.5.
“The UK manufacturing sector showed resilience in November, regaining much of the momentum lost in the previous month,” said NTC economist Rob Dobson.
“This suggests that part of the marked slowdown may have been solely the result of a hit to business confidence following the onset of the credit crunch.”
The figures tally with a survey from the Engineering Employers’ Federation which showed manufacturers enjoyed healthy growth in the final quarter of the year.
The EEF survey showed output and orders held well above their long-run average and investment intentions in the sector remained firm despite turbulence credit markets.
Manufacturing activity in the euro zone also picked up pace in November, recovering from October’s 26-month low.
The UK survey showed new order volumes rose strongly in November, with growth evenly distributed across the capital, consumer and intermediate goods sectors.
New export orders also showed a marked improvement with companies reporting improved demand from continental Europe and both the Far and Middle East.
Bank of England policymakers may be concerned that firms are passing on higher costs to consumers. Input price inflation picked up to a four-month high of 64.4, largely due to oil prices which rose to record highs close to $100 a barrel in November.
Output price inflation rose to 57.5, not far from September’s record high of 57.8.
Still, analysts said Bank policymakers may pay more attention to the service sector which accounts for a bigger proportion of the economy.