Final manufacturing PMI exceeds estimates with 54.1 points in January

Activity in the UK manufacturing sector improved more than expected in January, IHS Markit’s final report confirmed on Monday.

The IHS Markit / CIPS Manufacturing PMI Purchasing Managers Index for the UK seasonally adjusted it was revised up to 54.1 points in January compared to the 52.9 expected and the first reading of 52.9.

Despite the upward revision, the figure was at a three-month low.

Key Comments:

Supply chains have been tightened by Brexit and COVID restrictions.

Inflation of the cost of entry and the selling price is accelerating.

Rob Dobson, Director of IHS Markit, commented on the survey

“While many countries are seeing the manufacturing sector provide much-needed support for economic growth, as the service sector is affected by COVID-19, the UK manufacturing sector has been on the verge of stagnation. The combination of tougher COVID-19 restrictions and Brexit led to near-record supply chain disruptions, lower exports and higher costs. The impact was felt most in consumer goods producers, which showed sharp declines in production and new orders. There were also early signs that smaller companies were being hit harder by the tougher operating environment than medium and large scale producers. “

“The hope is that current constraints will begin to ease once COVID-19 restrictions are lifted, vaccines are rolled out, and ports, suppliers, and manufacturers adapt to the new post-Brexit business environment. Work slowly through the system. and growth will not deviate too much until 2021. However, there is no quick end in sight to these headwinds, and the longer current circumstances continue, the greater the potential damage to the industry and its suppliers“.