Start of 2016 sees UK manufacturing growth increase
The UK manufacturing industry accelerated to a three-month high in January according to the latest figures.
The Markit/CIPS UK manufacturing purchasing managers’ index (PMI) grew to 52.9 up on December’s figure of 52.1, and above the growth threshold of 50.0.
The results mark the 34th successive month that the PMI has remained above 50.0 mark.
Growth was driven by strong performances from larger manufacturing companies, with SMEs only seeing comparatively slight growth.
Exports orders, however, declined with Markit saying companies cited strong competition from abroad and difficult market conditions such as the Sterling – Euro exchange rate as problems.
For the fourth time in the last six-month, employment levels fell, albeit at a moderate level.
Rob Dobson, Senior Economist at Markit commented: ““The UK manufacturing sector registered an uptick in its rate of expansion at the start of 2016, shrugging off a number of potential headwinds, ranging from global financial market volatility to localised flooding in the North of the country.
“The domestic market remains the key growth driver. In contrast, the trend in new export orders continues to disappoint, falling back into reverse gear in January. Even after recent easing in the exchange rate, a number of manufacturers are still finding that the strength of the pound against the euro is impacting order inflows. Reports from companies also highlight how the general operating environment has become increasingly competitive both at home and abroad as firms scramble to win new customers.
“Strong competition on the sales side combined with the ongoing weakness of global commodity prices meant that manufacturers saw selling prices and input costs fall further in January. Subdued growth, rising global headwinds and a lack of inflationary pressure provide further cause for the Bank of England to push its first rate increase into the back and beyond of 2016.”