10 Mar UK manufacturing production rises
The seasonally adjusted S&P Global/CIPS UK Manufacturing PMI® posted 49.3 in February, up from 47.0 in January. While the overall PMI remained in contraction, manufacturing production rose for the first time in eight, albeit only slightly. The increase was underpinned by signs of firming client demand, with the consumer and investment goods sectors seeing new order increases. The downturn at intermediate goods producers continued but the rates of decline in output and new business eased to seven-month lows.
The overall level of new work decreased for the ninth consecutive month, although there were signs the trend is stabilising as the rate of contraction was only mild. New export business also showed signs of resilience, with the rate of contraction easing to its weakest in nearly a year.
Average vendor lead times shortened in February for the first time since June 2019. Average purchasing costs continued to increase but the rate of inflation eased for the fifth month running to the lowest since July 2020.
Manufacturing employment decreased for the fifth month in a row. Purchasing activity, input stocks and finished goods inventory also fell, reflecting efforts to control costs, minimise holdings and dismantle safety stocks.
Business sentiment improved for the third month running and to its highest level in a year. Almost 60% of companies forecast production would be higher in 12 months’ time, compared to only 10% anticipating a downturn. The positive outlook mainly reflected expectations of improved economic conditions, new product launches, planned investment and reduced supply chain issues.