UK manufacturing accelerates for first time in five months

1 February 2007
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01 February 2007 | Antony Barton

Rates of expansion for UK manufacturing and new orders accelerated for the first time in five months in January, according to the latest CIPS/RBS Purchasing Managers' Index.

The index, where a reading above 50 indicates growth, recorded manufacturing activity as 52.8 in January, an improvement on the previous month's figure of 52.0 and an increase for the nineteenth month in a row.

New orders recorded a reading of 54.1, up on December's performance of 53.2, and output increased to 53.6 from 52.2.

Companies linked increased output to growth of new work and improved plant efficiency. They also suggested an increase in new export orders, from 51.8 to 53.4, was the result of new export contracts from the Asia-Pacific region and the US. Yet other companies said demand from the US had been restricted by the low value of the dollar.

Output prices rose for the eighteenth successive month, from 53.5 to 54.2, with some companies saying that improved demand had prompted them to raise charges.

Shortages of some raw materials, particularly steel, meant an increase in supplier delivery times, with the index moving from 45.5 to 45.0. Some firms said a lack of transportation had also contributed to the latest decline in supplier performance.

Manufacturing in the Eurozone eased in January, dropping to an 11-month low, but still remained strong. The seasonally adjusted RBS/NTC Manufacturing PMI recorded 55.5 in January, down from 56.5 in December.


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