The UK manufacturing sector strengthened again in September, with output expanding and new order intake accelerating according to the latest Markit/Chartered Institute of Purchasing (CIPS) survey monitored by Kallanish.

Conditions in the UK manufacturing sector continued to improve at the end of the third quarter. Rates of expansion in output and new orders accelerated further. The domestic market remained a prime driver of new business wins, while the weaker sterling exchange rate drove up new orders from abroad.

At 55.4 in September, up from 53.4 in August, the seasonally adjusted Markit/CIPS Purchasing Managers’ Index (PMI) rose to its highest level since June 2014. Furthermore, the rebound in the PMI level since its EU referendum-related low in July has been sufficient to make the third quarter average (52.3) the best during the year-to-date, Markit/CIPS says.

Underpinning the latest scaling up of output was a marked increase in new business. Companies linked the latest increase to higher sales to both domestic and overseas clients, Export increases were supported by the weaker sterling exchange rate.

September saw the level of incoming new export orders increase at the fastest pace since January 2014. UK manufacturers reported improved demand from clients in Asia, Europe, the USA and certain emerging markets.

Higher import costs, a by-product of the weak exchange rate, led to a further substantial increase in average purchase prices in September. Manufacturers passed on part of the rise to clients in the form of higher charges. Output price inflation remained well above the series average.