UK factories see rate of growth slow

 
Tim Wallace
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MANUFACTURING output and employment increased in February, new data showed yesterday, but the pace of expansion was slower than in January.

The sector’s purchasing managers’ index (PMI) from Markit fell from 52 to 51.2 in the month as new orders from the Eurozone fell. Any figure above 50 indicates expansion.

Input prices rose at their fastest rate for 19 years, with oil, metals, transportation and chemical prices all jumping.

Domestic orders stabilised overall, but were slowed in part by falling demand from the public sector.

Manufacturers were also hit by weakening demand from the Eurozone, although that was in part offset by higher orders from the US and Asia.

The continued growth resulted in a second consecutive rise in employment, with Markit estimating the rise at around 5,000 new jobs.

“Manufacturers have persisted in working through backlogs of work, but the Eurozone crisis continues to loom large with continued declines in new work from the continent,” said David Noble from the Chartered Institute of Purchasing and Supply.

“As a result of continued growth in orders in Asia and the US, the focus for many manufacturers will be on developing as exporters to new markets. This will be critical if sustained growth is to be realised.”