UK manufacturing growth subdued amid supply chain disruptions
Activity in the UK manufacturing sector grew a touch more than initially estimated in February but remained subdued amid supply chain disruptions, according to a survey released on Monday .
The IHS Markit CIPS manufacturing purchasing managers’ index ticked up to 55.1 from a flash estimate of 54.9 and January’s reading of 54.1. Meanwhile, business optimism rose to a near six-and-a-half year high.
A reading above 50.0 signals expansion, while a reading below indicates contraction.
The survey found supply-chain disruption and rising cost pressure meant there was only marginal growth in output despite a modest improvement in new order intakes.
Companies reported improved demand from several markets, including the US, Asia, Scandinavia and in a few cases mainland Europe. However, they also said that the ongoing impact of the Covid-19 crisis, Brexit complications and shipping difficulties constrained export order growth.
Rob Dobson, director at IHS Markit, said: "The UK manufacturing sector was again hit by supply chain issues, Covid-19 restrictions, stalling exports, input shortages and rising cost pressures in February. Look past the headline PMI and the survey reveals near-stagnant production, widespread shipping and port delays and confusion following the end of the Brexit transition period.
"In fact the biggest contributor to the headline PMI reading was a near-record lengthening of supplier delivery times. However, while normally a positive sign of an increasingly busy economy, the recent lengthening was far from welcome, more often than not linked to problems resulting from Brexit and Covid related. The resultant shortages for a vast array of components and raw materials, as rising demand chased restricted supply, led to a further acceleration in input cost inflation to a four-year high."