The UK Manufacturing Purchasing Managers’ Index (PMI) rose above the 50-point neutral mark in February according to the latest survey by IHS Markit and the Chartered Institute of Purchasing and Supply (CIPS). Output rose at the fastest pace since April 2019 and vendor lead times lengthened as coronavirus supply-chain disruption rose, the survey results monitored by Kallanish revealed.
The seasonally-adjusted IHS Markit/CIPS PMI rose to 51.7 in February, up from 50.0 in January, but below the earlier flash estimate of 51.9. The PMI posted above the 50.0 neutral mark for the first time in ten months.
Manufacturing output increased at the fastest pace since April 2019, as growth strengthened in both the consumer and intermediate goods sectors. In contrast, the downturn at investment goods producers continued.
“The main factor underlying output growth was improved intakes of new work. Business optimism also strengthened, hitting a nine-month high, reflecting planned new investment, product launches, improved market conditions and a more settled political outlook,” Markit/CIPS says.
The effects of the COVID-19 outbreak had a noticeable impact on supply chains during February. Average vendor lead times lengthened to the greatest extent since July 2018, while the eight-point drop in the level of the seasonally-adjusted ‘Suppliers’ Delivery Times Index’ was the largest in the 28-year survey history.
UK crude steel output rose year-on-year in January, bucking the general European trend, but the sector now faces the combined effects of Brexit uncertainty, poor weather, and coronavirus-induced economic inertia.
