Manufacturing 'kick-starts back into life'

The UK manufacturing sector started 2012 on a positive footing with a key sector index rising to an eight-month high.

The seasonally adjusted Markit/CIPS UK Manufacturing Purchasing Managers’ Index climbed to 52.1 in January, from a revised reading of 49.7 in December.

Contributing to the performance was output expanding at the fastest pace since last March, new orders rising following a period of contraction and payroll numbers stabilising. Cost pressures continued to ease, as average input prices fell for the third straight month.

Manufacturing production also expanded for the second successive month, supported by growth of new orders and the clearance of backlogs of work.

Foreign demand rose for the second month running in January, amid reports of improved order inflows from clients in Brazil, China, the Middle East and the US. However, the rate of increase was only moderate and less marked than one month earlier.

Average input prices declined for the third successive month in January, with the rate of deflation the steepest since June 2009. Manufacturers reported lower costs for commodities, metals, packaging, paper, plastics and timber.

Rob Dobson, senior economist at Markit says, ‘January saw manufacturing kick-start back into life, with output expanding at the fastest pace since March 2011 and new orders rising for the first time in seven months.

‘Growth is nowhere near the surging highs of 12 months ago, but this is nonetheless a vast improvement on the 0.9 per cent reduction in output seen at the end of last year.’



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