UK manufacturing grew for a tenth consecutive month in January according to the latest PMI figures, with new orders and employment also rising.
Markit’s UK Manufacturing Purchasing Managers’ Index (PMI), a survey compiled of more than 600 industrial companies, slid to 56.7 in January from December’s 57.2.
Despite the UK’s PMI hitting a three-month low, it was comfortably above the survey’s long-run average of 51.3, suggesting a strong start for the economy in the first quarter of 2014.
“Although the pace of output expansion has cooled slightly in recent months, growth is still tracking at one of the highest rates in the 22-year survey history,” said Rob Dobson, senior economist at PMI compiler Markit.
“The domestic market remains the main pillar of the rebound, pushing the rate of expansion in total new orders back towards last November’s 19-year record.”
Carl Williamson, manufacturing sector lead at Lloyds Bank Commercial Banking, Mid-Markets, said the latest figures illustrate the growing confidence of the sector as a whole.
“Buoyed by positive global macroeconomic indicators and the relatively settled trading environment that has emerged, manufacturers have renewed confidence to invest in capacity, plant, product development and the exploration of new markets,” he said.
“January’s positive domestic demand and export figures shows the momentum gained in the sector during 2013 is set to continue this year.”
New export orders rose to 57.5 in January from December’s 54.4, its highest level since February 2011, citing cited improved demand from North America, Europe, Asia, Brazil and the Middle East.
Employment in manufacturing also rose for the ninth straight month, albeit at a slightly slower rate than in December.
But Lee Hopley, chief economist at manufactures’ organisation EEF, warned of caution due to continued doubts over investment spending and high energy costs.
“With separate data showing a further improvement in manufacturing activity across the euro zone, this supports our forecast for UK manufacturing output to grow by 2.7% this year, the fastest rate of expansion in four years,” she said.
“Some doubts will persist, however, over the durability of this upturn given the ongoing weakness in investment spending and concerns over the impact of high energy costs across the sector.”