UK manufacturing growth accelerates in January, beats views

UK manufacturing growth accelerated at the start of the year, figures released on Monday showed.

The Markit/CIPS manufacturing purchasing managers’ index for January rose to 52.9 from 51.9 in December.

This was better than economists’ expectations for a reading of 51.8 and marked a three-month high.

Markit said the increase reflected improved inflows of new work from the domestic market. The rate of expansion in output accelerated to a 19-month high, but the trend in new export orders fell back into decline.

Rob Dobson, senior economist at Markit, said: “The UK manufacturing sector registered an uptick in its rate of expansion at the start of 2016, shrugging off a number of potential headwinds, ranging from global financial market volatility to localised flooding in the North of the country.

“The domestic market remains the key growth driver. In contrast, the trend in new export orders continues to disappoint, falling back into reverse gear in January. Even after recent easing in the exchange rate, a number of manufacturers are still finding that the strength of the pound against the euro is impacting order inflows. Reports from companies also highlight how the general operating environment has become increasingly competitive both at home and abroad as firms scramble to win new customers.”