Member Article

UK manufacturing shows slight stabilisation

UK manufacturing showed signs of stabilisation at the end of 2011, the Markit/CPS purchasing managers’ index.

The PMI rose to 49.6 last month from 47.7 in November, when a small fall had been expected.

Commenting on today’s PMI numbers Tony Sarginson of EEF, the manufacturers’ organisation, said:
“December’s manufacturing data is something of a mixed bag. The overall indicator may suggest another month of contraction across the sector, but there are some positive points to take away.

Rob Dobson, Senior Economist at Markit, and author of the report said: “December brought some brighter news for UK manufacturers.

“The level of production stabilised following contractions in October and November as a solid upsurge in new export business countered some of the weakness in the domestic market.

“Job losses were also less widespread than November, suggesting that pessimism about the coming year may have lifted a little.”

He went on to say that manufacturers are currently relying heavily on backlogs of work to prop up production, and that an overall improvement in order books would need to occur if the sector is to avoid a protracted period of lacklustre performance.

David Noble, chief executive office at the Chartered Institute of Purchasing & Supply, said: “There’s no denying that this year will bring both fresh and familiar challenges for the UK manufacturing sector.

“It is encouraging to see output remain steady last month after the declines of recent months, but with the sector highly exposed to a shaky Eurozone, and reports of softening demand.

“Ironing out economic problems in key export partners will be critical to how the sector performs.

’There are fragile signs of growth centred on some very specific parts of the sector where demand remains strong, particularly consumer and capital goods, with some businesses even reporting record growth that defies the gloom.

“That said, for every bright spot there is another business struggling to build momentum.”

This was posted in Bdaily's Members' News section by Tom Keighley .