(Bloomberg) — U.K. manufacturing growth accelerated to its fastest pace in eight months in March as overseas demand increased.
Britain’s Purchasing Managers’ Index climbed to 54.4 from a revised 54 in February, in line with the median forecast of economists, Markit Economics Ltd. said on Wednesday in London. The gauge has held above 50, the dividing line between expansion and contraction, for two full years.
The U.K. economy grew more than initially estimated in the fourth quarter as consumers and exporters steered Britain into its longest stretch of uninterrupted growth since 2008. Growth has been largely powered by domestic demand with exports only just starting to overcome struggles in Europe, Britain’s biggest trading partner.
“The U.K. manufacturing sector has continued its bright start to 2015,” said Rob Dobson, a senior economist at Markit in London. “The drivers of growth are heavily skewed toward domestic consumers” and “a solid pick-up in new export orders will also benefit growth going forward,” he said.
Markit said new orders at manufacturers increased at the fastest pace in eight months in March, while export demand rose to its strongest level since August. Consumer goods were largely responsible for the pickup in output.
For the first quarter, factory output is likely to have increased about 0.6 percent, Dobson said.
The Bank of England has said it will keep the key interest rate at a record low as it monitors the implications of the unprecedented slide in the inflation rate to zero.
In March, there was a “substantial decline” in factory input prices, driven by cheaper oil and a stronger pound, Markit said. That’s feeding through to selling prices as they fell for a third month, according to the report.
Markit will publish its U.K. indexes for construction on Thursday and for services on Tuesday.
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