Figures Show 'Strong January For Manufacturers'

Statistics Released As Part Of The PMI Index Showed UK Made A Positive Start To 2014


Fergal Dowling, Partner | +44 (0)121 214 5476

The latest Purchasing Manager's Index (PMI) statistics indicate the UK saw strong manufacturing growth this January.

Data collated by Markit and the Chartered Institute of Purchasing and Supply (CIPS) gave the sector a score of 56.7 - with any figure over 50 indicating an expansion in production.

While this was down on December's 57.2 rating, this was considered an unusually high number and analysts are surprised this growth has sustained for as long as it has.

The manufacturing sector was one of the worst hit by the recession, with only the construction industry seeing more job losses and contraction in the UK.

At its lowest, the PMI sat just below 35, indicating that order books were emptying at a rapid rate - but this has since turned around and recent PMI numbers are some of the strongest seen in over a decade.

One of the most encouraging revelations from Markit and the CIPS is that manufacturers mentioned they saw improved demand for their products from North America, Asia, Brazil, Scandinavia, the Middle East and even mainland Europe.

It is widely believed the ability of the UK to sustain its current economic recovery is dependent on demand from growth markets, so chancellor George Osborne will no doubt be pleased by these figures.

Rob Dobson, senior economist at Markit, said: "UK manufacturing made a strong start to the new year, continuing the robust upsurge in production seen at the tail end of 2013.

"Although the pace of output expansion has cooled slightly in recent months, growth is still tracking at one of the highest rates in the 22-year survey history."

Despite recent good economic news benefiting the coalition's poll numbers, Labour argues the proceeds of recent growth are not being returned to the most vulnerable in society.

Chris Leslie, shadow chief secretary to the Treasury, said: "Wages after inflation have fallen by 2.2 per cent a year since 2010."

The government disputes these figures and stated recent statistics show the lowest earning 90 per cent of the population saw their pay packets increase in 2013 after inflation.

Expert Opinion
These figures are very positive and indicate that improvements are continuing to be seen in many sectors, with the economy picking up after what has been a difficult few years for the public and business.

"Small businesses will be playing their part in this, with their reputation as key drivers of the recovery.

"The findings interestingly highlight growing demand from foreign countries, which demonstrates that smaller firms could benefit greatly if they put strategies in place to considering overseas development and expansion.

"We would urge ambitious and innovative growing businesses to think about carefully about their future prospects and seek vital legal advice on how they could take key steps towards achieving their ambitions."
Fergal Dowling, Partner