UK Manufacturing PMI hits three-month high

Posted on 1 Mar 2022 by The Manufacturer

The UK manufacturing industry grew last month at the fastest rate since July 2021, new figures released today show.

According to the latest IHS Markit/CIPS UK manufacturing Purchasing Managers’ Index (PMI), February’s final manufacturing PMI was 58, the highest it’s been in three months and up from 57.3 in January.

Fueled by healthier domestic demand, fewer raw material shortages and easing global supply chain pressures, the UK manufacturing industry grew at a faster pace in February than it did the previous six months.

Tuesday’s figures also reveal a positive outlook for the manufacturing sector this year. Indeed, almost 64% of survey respondents said they believe production would increase over the next 12 months. This takes the overall degree of optimism to a six-month high. Market growth, strong order pipelines, lower pandemic-related  restrictions and reduced levels of supply-chain disruption were all cited as reasons for the positive sentiment.

Speaking about the latest figures, Henry Anson, Director at Hennik Group, publishers of The Manufacturer, commented: “Really positive figures coming from PMI, demonstrating that the sector is working through the COVID and Brexit inspired supply chain issues that have been dogging the sector for the past 18 months or so. The sector is in good shape and future proofing itself against further global disruptions by adopting new digital technology.”

Rob Dobson, Director at IHS Markit, said: “February saw rates of expansion in UK manufacturing production and new orders both accelerate. Growth was boosted by stronger domestic demand and by firms catching up on delayed work as material shortages and supply chain disruptions started to dissipate. Consumer goods output in particular also benefitted from increased sales due to a further easing of COVID restrictions. However, the trend in new export orders is less positive, slipping back into contraction after January’s short-lived uptick. While companies maintain a positive outlook for the year ahead, rising headwinds, especially the intensifying geopolitical backdrop, are ratcheting up near-term risks to demand and confidence.

“Inflationary pressure also remained elevated across the manufacturing sector in February. Companies were hit hard by rising transportation, energy and commodity prices, leading to further increases in selling prices. That said, rates of inflation for input costs and output charges eased further. Although this easing may have provided some temporary respite, signs that energy and oil prices may stay high is a further cause for concern.”

*image courtesy of Shutterstock