Manufacturing ‘back on the road’

1 March 2010

1 March 2010 | Jake Kanter

Activity in UK manufacturing remained strong last month as output rose to a high not seen in almost 14 years.

According to the latest CIPS/Markit Manufacturing Purchasing Managers’ Index – where a figure above 50 represents growth – total activity in the sector registered 56.6 in February. This was unchanged from the previous month after the January reading was revised down slightly from 56.7.

Production increased for the ninth consecutive month, with the rate of growth reaching the highest point since September 1996. The subsector registered 59.8 in February, compared with 59.4 the month before.

New orders were also strong last month, as companies reported increased demand from domestic and export markets. Staff numbers rose for the second consecutive month on the back of this demand.

CIPS chief executive David Noble said manufacturing was “firmly back on the road”. “We’re really seeing signs that seem to point towards a full sector recovery. Most notably, companies reported that higher demand from export markets wasn’t just on the back of the softer sterling but also improving global market conditions.

 “Meanwhile there were mentions that many production lines, which ground to a halt at the height of the recession, kicked into action again.”

Last month, risk consultancy Marsh said recovery in the manufacturing industry could open up organisations to new supply chain risks, such as increased competition for suppliers.

Further coverage of PMI reports is available here.

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