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1 March 2012 | Adam Leach
Cost pressure has increased in
the manufacturing sector for the first time in four months, resulting in a
slowdown in the rate of growth, according to a report.
The Markit/CIPS Manufacturing
PMI, published today, reported a growth figure for February of 51.2, indicating
growth but at a slower rate than January’s eight-month high of 52.0.
Production and employment
continued to increase, however, the impact was tempered by the first rise in
input costs for four months, which hit new orders.
The measurement in the survey
tracking input prices posted the highest monthly increase for more than 19
years, the second biggest ever, as companies reported high prices for
chemicals, feedstocks, metals, oil and other commodities. In addition, a drop
in demand from Europe cancelled out the benefits of increased export orders
from Asia and the US.
CIPS CEO David Noble, said: “The
manufacturing sector consolidated on January’s sharp increase in growth, but
the return of rising oil prices and lacklustre demand is a cause of some
trepidation. While the tentative boost in employment is a sign of increased
confidence in the sector, this can be attributed to efforts to fulfill the
growth in new orders seen at the beginning of the year.”
Rob Dobson, senior economist at
Markit, said: “If this combination of rising costs and weak demand persists,
sustaining output growth and job creation will become increasingly difficult.”