UK factory output rises but new orders slow – PMI

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UK manufacturing output strengthened in January but new order growth slowed, a survey showed.
The IHS Markit/CIPS purchasing managers’ index eased to 57.3 from 57.9 a month earlier, remaining well above the reading of 50 that separates growth from shrinkage.

Production rose at the fastest pace for six months as factories responded to new orders, backlogs of work and capacity shortfalls. As a result, manufacturing employment rise for the 13th consecutive month.

The slight dip in the overall score was caused by slower growth of new orders, particularly within the UK. New export business rose slightly.

The cost of materials continued to rise but the rate of increase dropped to a nine-month low as strain on supply chains eased. Manufacturers passed on the higher costs to their customers.

Rob Dobson, a director at IHS Markit, said: “UK manufacturing made a solid start to 2022, showing encouraging resilience on the face of the Omicron wave, with growth of output accelerating as companies reported fewer supply delays. Causes for concern remain, however, as new orders growth slowed, exports barely rose, staff absenteeism remained high and manufacturers’ ongoing caution regarding supply chain disruptions led to the beefing up of safety stocks.”

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