The headline PMI was driven by a stronger expansion in new business received by goods producers in October. The upturn in new orders accelerated to a five-month high and was widely attributed to greater client demand across the domestic market. Conversely, new export orders grew only fractionally and at the weakest pace in the current three month sequence of growth.
Production levels expanded strongly in October and at a rate that was broadly in line with the series trend. Panellists commonly attributed the rise in output to greater client demand and increased efforts to clear backlogs.
In line with another rise in backlogs and a sustained increase in new business, employment growth accelerated in October. The rate of job creation reached a ten-month high and was strong overall. Respondents also noted that anticipations of greater new orders during the fourth quarter had led to the upturn.
Manufacturing firms recorded pressures on profit margins in October, with the rate of input price inflation quickening to a marked pace. The rate of increase reached a three-month high and was largely linked to higher raw material and metal prices stemming from the ongoing effects of tariffs.
Consequently, manufacturers tried to partly pass on higher cost burdens to their clients through increased output charges. Although the rate of output price inflation accelerated to the fastest since July, it remained well below that seen for input costs.
Meanwhile, firms registered a strong rise in buying activity amid reports of greater efforts to stockpile. Pre-production inventories increased for the seventeenth month running, albeit modestly, as longer input deliveries curbed stock building efforts.
Finally, output expectations towards the coming 12 months improved, with firms suggesting that anticipations of further new order growth drove optimism.