02 October 2006 | Rebecca Ellinor

New product lines, more orders and longer working hours all helped boost output in the UK manufacturing sector last month.

The CIPS/RBS purchasing managers' index (PMI), a composite indicator of sector conditions in which an index above 50 means growth, was 54.4 for September. This was a stronger performance than August's five-month low of 53.1.

Input costs remained high, however, with companies reporting rising prices in a number of metals, chemicals, plastics and timbers. But purchasing managers mitigated this with good stock inventory, reducing pre- and post-production stock.

The report also recognised that UK manufacturers had a solid degree of pricing power in September as average factory gate prices rose for the 14th consecutive month. The new export orders index was up from 47.7 in August to 53.1 in September.

The RBS/NTC Eurozone Manufacturing PMI was unchanged at 56.6 in September as output, new orders and employment all rose at strong rates.

Coverage of previous PMI reports is available at www.supplymanagement.com/pmi

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