Sept 3. - The downturn in Britain's manufacturing sector eased significantly in August as domestic clients placed more orders, according to an unexpectedly strong Purchasing Managers' Index, boosting the chances that the country is moving out of recession. Hayley Platt reports.
A surprisingly robust survey of activity in Britain's manufacturing sector is boosting hopes the country is on its way out of recession. The UK Purchasing Managers' Index jumped to a four-month high of 49.5 in August. That's a big improvement from the July level of just over 45, but still below the 50 mark that denotes growth. Rob Dobson is a senior economist with Markit, who compile the survey. SOUNDBITE: Rob Dobson, Senior Economist, Markit, saying (English): "What we've seen is a nice bounce in that index, what else is pleasing is new orders held their ground. Output is still falling but at a much reduced pace, we also saw good growth from the consumer goods sector and a return to growth for intermediate goods producers. So what it's showing is UK manufacturing is still very fragile, facing a lot of headwinds." Despite the positive number, exports remain weak, particularly to the rest of Europe. SOUNDBITE: Rob Dobson, Senior Economist, Markit, saying (English): "That number is higher than a lot of what we're seeing in the euro zone so there is some heart in that, but again the euro zone is our major trading partner so if the euro zone is not doing well that's going to have a knock on effect for our exporters." The pressure remains on the UK government to get Britain's ailing economy moving again. Prime minister David Cameron has promised measures aimed at fuelling growth. On Sunday UK Finance minister George Osborne gave a taste of what's to come. SOUNDBITE: George Osborne, UK Finance Minister, saying (English): "In the next couple of weeks you'll see us introduce into parliament legislation to speed up planning decisions, to speed up the processes that mean we can actually build roads more quickly then it takes to fight a world war." A cabinet reshuffle is widely expected to take place this week. As politicians return from their summer break, the Conservative-led coalition will be eager to show it has a credible plan to help spur the economy. Hayley Platt, Reuters.