Register for Digital Look

UK manufacturers keep recovery on track

By Lee Wild

Date: Monday 01 Mar 2010

UK manufacturers keep recovery on track

Britain’s manufacturing industry appears to be enjoying a strong first quarter as data revealed growth remained steady at a 15-year high in February.

The CIPS/Markit purchasing managers’ index stuck at 56.6 last month, the same as in January and the best number since October 1994.

That easily beat forecasts for a dip to 56.4. A read of over 50 indicates growth.

"The manufacturing sector seems firmly back on the road after this severe recession. It's particularly positive that the recovery is broad-based and being partly driven by new order growth rather than just re-stocking," said CIPS boss David Noble.

Output was up for the ninth month in a row, rising at its fastest rate since September 1996, while the new orders index remained close to January's six-year high.

“The PMI survey suggests that the good news provided by the surge in output reported by the Office for National Statistics in December will have continued in early-2010," said Rob Dobson, senior economist at Markit Economics.

"Even more encouraging are the growing signs that business-to-business and investment spending are recovering, which points to a more sustainable and broad-based recovery."

Manufacturing only accounts for about 13% of total gross domestic product (GDP), but today’s number increases hopes that the UK economy continued growing in the first quarter after emerging from recession at the end of 2009.

On Friday, fourth quarter GDP was revised up to a bigger than expected 0.3% from an original estimate of just 0.1%.

“This is really rather good!” Howard Archer, chief UK economist at IHS Global Insight, said of today’s report.

“It appears that manufacturers are currently benefiting appreciably from leaner stock levels, improved competitiveness in both domestic and foreign markets stemming from the weak pound, and firmer demand in key overseas markets.”

“There are also signs that domestic demand is picking up,” he added. “Hopefully, therefore, the industrial sector can see decent expansion in the first quarter of 2010 and help the economy to continue to grow, although it must be borne in mind that the sector only accounts for 17.2% of GDP.”

« Go back to news channel

Email this article to a friend

or share it with one of these popular networks:


Top of Page