Sustained pressures on capacity contributed to a drop in stocks of finished goods for the first time since March. Pre-production inventories rose marginally, but some survey respondents noted that efforts to boost their warehouse stocks had been constrained by longer delivery times from vendors.
Latest data pointed to a sharp and accelerated rise in input prices across the manufacturing sector, which was linked to higher raw material costs and strong demand for inputs. The overall rate of cost inflation was one of the fastest seen in the past five years, which contributed to the sharpest increase in factory gate prices since September 2014.
Yet, manufacturers anticipate a continued recovery in production volumes over the months ahead, with business optimism picking up to its strongest since the start of 2016. Moreover, input buying expanded at the fastest rate since July and backlogs of work were accumulated for the fourth month running.