The UK manufacturing sector could be 'turning a corner' after months of decline.
In a boost to the economy, a monthly health check of factories showed the downturn had eased significantly over the past month.
S&P Global said the sector activity index rose to 47.2 in November from 44.8 in October.
That was still below the 50 mark between contraction and growth, but it was the third increase in a row and the strongest score since April.
“November saw a potential turnaround for the UK manufacturing sector,” the report said.
Boost: A report predicted that a million cars will roll off UK production lines this year – well above previous predictions
A separate report predicted that one million cars will roll off UK production lines this year – well above previous predictions. The Society of Motor Manufacturers and Traders (SMMT) previously expected 860,000 cars would be produced in Britain by 2023.
But after a round of investment in the sector, they revised their forecasts.
The latest forecast is 18 percent higher than 2022 output, the worst year for British car production since 1956.
But it still falls short of the 1.5 million or more cars produced before the pandemic.
It came as the SMMT said 91,512 cars left UK factories in October – a 32 per cent increase on the same month last year and the best performance since 2019.
SMMT chief executive Mike Hawes said: “These figures, which come on the back of a series of major investment announcements, point to a bright 2024 for the UK automotive sector. Government and industry are committing billions to transform the industry for a zero-carbon future.”
And in a further boost to the economy, mortgage provider Nationwide said house prices unexpectedly rose 0.2 percent in November, following a 0.9 percent rise in October.
The rally came after the Bank of England halted its series of rate hikes, from a record low of 0.1 percent to a 15-year high of 5.25 percent.
“There has been a significant change in market expectations for the future path of bank rates in recent months, which, if sustained, could provide much-needed support to housing market activity,” said Robert Gardner, chief economist at Nationwide.
Despite signs of life in the economy, S&P warned that manufacturers “remained on a cautious basis, with continued market uncertainty and the need to control costs, leading to job losses, inventory depletions and lower purchases.”
And Martin Beck, chief economic advisor of the EY ITEM Club, pointed out that manufacturers still face a significant demand hurdle caused by uncertainty due to geopolitical tensions.
He added that the manufacturing sector faces the same sluggish outlook as the broader economy in the near term.
But business confidence improved in November “reflecting expectations that new product launches, economic recovery and a stabilization of market conditions would support future output growth,” the report said.