UK manufacturing grows in January

Comments Email

Growth in UK manufacturing production rose to a 16-month high in January, according to new figures.

The latest Markit/Chartered Institute of Purchasing & Supply (Cips) Purchasing Managers Index recorded manufacturing output expanding at its fastest rate since September 2011, thanks to an increase in new orders and what it called “ongoing efforts to clear backlogs of work”.

However new exports continued to fall.

At 50.8 in January the index recorded an above-50 mark figure – regarded as ‘neutral’ growth’ – for the second month running.

The survey said companies reported a marginal increase in new orders for the third successive month, “which some attributed to improved inflows of new business from the domestic market.

“This offset a further reduction in new export orders, which fell for the 13th month in a row.”

Firms linked lower volumes of new work from overseas to the ongoing weakness of markets in mainland Europe.

Companies also reported higher prices were being paid for chemicals, energy, packaging and plastics.

David Noble, Cips’ chief executive, said that on the surface the latest data was good news for UK manufacturing.

“However underlying factors suggest deep rooted problems remain. Until these are resolved, the sector will continue to be pulled from pillar to post.

“Economic weakness in Europe is the primary issue affecting the industry, reflected in the continued scarcity of export orders during January and the fact that many firms remain cost cautious in response to increased input prices.”

This situation looked set to continue in the face of the difficult macro-economic conditions, he added.

Data was collected by Markit/Cips between 11 and 28 January.