According to the report from IHS Markit / CIPS, October PMI data highlighted a robust and accelerated increase in UK private sector business activity, with growth the strongest for three months. Survey respondents widely reported buoyant business and consumer spending due to the roll back of pandemic restrictions. Service providers led the recovery, but manufacturers signalled another slowdown in production growth due to severe shortages of staff and materials. Stronger wage pressures and the worsening global supply chain crisis contributed to the fastest rate of input price inflation at UK private sector companies since this index began in January 1998.
At 56.8 in October, up from 54.9 in September, the headline seasonally adjusted UK Composite Output Index was the highest since July and remained well above the neutral 50.0 mark. There were divergent growth trends by sector, largely due to the impact of supply shortages on manufacturing companies in October.
Service sector activity (index at 58.0) outpaced manufacturing production (50.6) by the widest margin since February 2009. The latter saw its weakest output performance for eight months. Goods producers widely commented on difficulties meeting customer demand due to capacity constraints resulting from lengthy supplier lead times and shortages of staff. Around 64% of UK manufacturers reported worsening supplier delivery times in October, while only 1% saw an improvement. Measured overall, new business volumes increased at a strong pace in October and the rate of expansion was the fastest for three months.