Manufacturing PMI touches 13-year high

An IHS Markit report revealed that from 56.8 in September, the manufacturing PMI rose to 58.9 in October, showing signs of rebound. This is the highest in the last 13 years; while sales increased to the highest in nearly 12 years,  led by the intermediate goods category and robust expansions in the consumer and investment goods sub-sectors. The report attributed this to relaxation in Covid-19 restrictions, improved market conditions, and the rise in demand. At the same time, the new export orders rose at a nearly six-year high pace.

The level of confidence was also fuelled by hopes of an end to COVID-19 cases and the reopening of other sectors in the economy underpinned positive sentiment towards the year-ahead outlook for production. “Companies were convinced that the resurgence in sales will be sustained in the coming months, as indicated by a strong upturn in input buying amid restocking efforts,” stated Pollyanna De Lima, Economics Associate Director at IHS Markit.

However, October saw another reduction in payroll numbers, falling for the seventh consecutive month. This has been the sharpest fall in this period and is attributed to government guidelines related to the coronavirus pandemic.