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- UK manufacturing expands at fastest pace since April 2019
UK manufacturing expands at fastest pace since April 2019
According to the report from IHS Markit/CIPS, growth of manufacturing output accelerated to a ten month high in February, as domestic demand continued to recover on the back of reduced political uncertainty. Supply chain disruptions were rapidly emerging, however, as the outbreak of COVID-19 led to sizeable raw material delivery delays, rising input costs and increased pressure on stocks of purchases.
The seasonally adjusted IHS Markit/CIPS PMI rose to 51.7 in February, up from 50.0 in January, but below the earlier flash estimate of 51.9. The PMI posted above the 50.0 neutral mark for the first time in ten months. Economists had expected an increase to 51.8.
Manufacturing output increased at the fastest pace since April 2019, as growth strengthened in both the consumer and intermediate goods sectors. In contrast, the downturn at investment goods producers continued. The main factor underlying output growth was improved intakes of new work. Business optimism also strengthened, hitting a ninemonth high, reflecting planned new investment, product launches, improved market conditions and a more settled political outlook.
Less positive news was provided by the trend in new export business, with overseas demand decreasing for the fourth successive month in February. Companies reported reduced new work intakes from Asia (especially China) due to the COVID-19 outbreak. There were also reports of efforts to re-route supply chains away from the UK (following Brexit) contributing to weaker demand from the EU.
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