The Manufacturing PMI for January hit 52.1 in January providing a surprise rebound and reflecting success in accessing new international markets.
The Purchasing Managers Index (PMI), produced by /MarkitCIPS has become a monthly touchstone for economic health. The last six months of PMI figures for manufacturing have been in the doldrums but in January as score of 52.1 puts manufacturing back into growth (any number below 50 represents economic contraction).
Data compiler Markit has said this result, unexpected by experts, indicates Britain could skirt the effects of a second full blown recession if the manufacturing sector remains strong. “This surprising rebound in January means a return to recession is by no means a certainty,” said Markit economist Rob Dobson.
Mark Lee, head of manufacturing for Barclays Corporate attributed the growth to concerted efforts within the manufacturing sector to look beyond Europe for export opportunities. “Today’s PMI figures are a shot in the arm for manufacturing, a sector that appears to be increasingly looking outside of the Eurozone for export growth, with orders increasing in markets as diverse as Brazil and the Middle East,” he said.
Manufacturer’s organisation EEF has however, advised caution in response to the encouraging results, which hail expansion at the fastest pace since March 2011. Chief economist Ms Lee Hopley said that “This is not a return to the strong growth seen earlier in the recovery [but] it is a rebuttal to fears that manufacturing is sliding backwards with the mood in the sector being one of cautious optimism.”
The international response to UK manufacturing revival and expansion overseas has been one of aquisitive interest according to Mr Lee of Barclays Corporate. “Those UK manufacturers that have a more global client base also remain a major target for international acquirers, and we have seen a significant increase in the number of acquisitions of UK companies by offshore interest,” he commented.