Data collected 12-25 February 2014
- Manufacturing PMI ticks higher
- Strong growth of output and new orders
- Job creation hits 33-month record
The strong upswing in the UK manufacturing sector was maintained during February, as levels of production and new business continued to rise at robust and above-trend rates. The solid performance of the sector again filtered through to the labour market, with jobs added at the fastest pace since May 2011.
At 56.9 in February, from a revised reading of 56.6 in January, the seasonally-adjusted Markit/CIPS Puchasing Managers' Index® (PMI®) ticked higher and signalled improved operating conditions for the eleventh straight month. higher output to promotional activity, new product launches and investment in new machinery. At 56.9 in February, from a revised reading of 56.6 in January, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index
The strengthening domestic market remained the primary driver of the manufacturing recovery, underpinning an eleventh successive monthly rise in production volumes. Companies also linked
Consumer, intermediate and investment goods producers all reported robust increases in output, new orders and employment during February, suggesting that the upturn remained broad-based by sector.
New export business also posted a solid gain in February. However, the rate of increase eased from January’s near three-year record. Manufacturers reported improved inflows of new work from clients in Europe, the US, China, the Middle East and Africa.
The pace of jobs growth reached a 33-month high in February, as the improved performance of the sector encouraged companies to take on more staff. Also underpinning the rise in employment were signs of strain on the capacity of some firms, as highlighted by a slight gain in backlogs of work during the month.
Strong demand also aided the pricing power of UK manufacturers, as average selling prices rose for the eighth month running and to a greater extent than in January. This mainly reflected efforts to improve profitability and recover prior cost increases, as the latest data showed that input prices were unchanged during February.
Holdings of finished goods were depleted for the fourth month running in February, with the rate of reduction being both marked and faster than in the previous survey period.
Stocks of purchases also dipped lower, but fell at only a moderate pace that was much slower than that signalled in January. The weaker pace of depletion mainly reflected a marked increase in purchasing activity at UK manufacturers.
David Noble, Group CIPS CEO said:
"UK manufacturing remains remarkably resilient in February, with employment levels speeding ahead. Driving the trend of recovery this month was the rate of increase in staffing levels, which reached a 33-month high. Increasing levels of production, new orders amongst the steepest in the survey’s history and positive expectations, helped sustain this solid growth and are encouraging signs for the next few months.
"Supporting the industry’s upswing in February was the strong domestic market which was the prime source of new business and sale volumes. Conversely to the previous month, overseas demand, despite remaining elevated, lost some of its impetus, with exchange rate fluctuations playing a part.
"Input prices showed no change, giving factories some breathing space to increase their selling prices and allowing them to catch up on profitability, whilst protecting margins. Added to this, backlogs of works increased for the first time in over three years, keeping hopes of stability alive for the months ahead."
The Markit/CIPS PMIs are available to purchase.