Factory sector gets help as exports to China rise

Tim Wallace
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RISING exports held up UK manufacturing output last month, according to Markit’s purchasing managers’ index out yesterday, though output declined over the final quarter of 2011 as a whole.

Coming in at 49.6, the monthly PMI figure showed a small decline in output, compared with a larger contraction of 47.7 in both November and October.

Any figure above 50 represents expanding output.

Although 2011 began strongly, with manufacturing PMI of 61.3 in January, five of the past six months have seen falls in the sector’s output.

The final quarter of the year saw the largest decline in the sector since the second quarter of 2009, and total levels of work have now fallen for six consecutive months.

However, new export orders grew for the first time in five months, largely due to rising demand from Germany, eastern Europe and China.

“Looking ahead, manufacturers are currently relying heavily on backlogs of work to prop up production,” said David Noble from the Chartered Institute of Purchasing and Supply.

“This is only a temporary fix, and the trend in overall order books needs to improve if the sector is to avoid a protracted period of lacklustre performance.”