The UK Manufacturing Purchasing Managers’ Index (PMI) showed solid growth for March 2018 at 55.1, up from 55.0 in February. Output continues to grow and cost pressures have eased, all spelling good news for UK manufacturers.
Output still growing
There was steady growth for the UK manufacturing sector throughout March, with output growth increasing. In contrast, new orders and employment, both up in previous months, are growing at a slower pace.
Manufacturers in the UK are seeing a steady flow of new business, both domestically and internationally. With new export orders up for nearly two years in a row, export business is thriving; with manufacturing firms putting success in this area down to Sterling weakness, greater marketing and awareness, and repeat business.
Cost pressures ease
Both input and output costs, which have been building significantly over the past year, have eased somewhat since February, providing a further cause for optimism.
Manufacturing sector confidence remains strong for the UK, with over half of companies surveyed forecasting business expansion in the coming year.
Tony Piggott, Head of Corporate at Halo Financial, observed, “More good news for the UK manufacturing industry, as growth continues and the overall trends look positive. Cost pressures have calmed a little and output and exports are still on the up, although growth is at a slower pace in terms of new orders and jobs.”
“A number of favourable conditions have been in place for UK exporters, helping to boost business and secure employment in the sector. It is also significant that the Eurozone manufacturing results, in contrast, have fallen to an eight-month low, making the UK more competitive. However, Sterling is forecast to be strong throughout April, so exporters will need to factor this in to their planning to avoid higher costs and continue to sustain business growth, particularly in their efforts to diversify and launch new products.”
Dorrien Peters, Partner and Head of Manufacturing at law firm, Irwin Mitchell, commented on the results: “The manufacturing sector is continuing to deliver a strong performance, buoyed in recent months by booming global trade volumes and the strong economic performance of key trading partners including the US and the EU.
“I expect this to continue in the short term and result in the continuation of solid output figures. However, I anticipate that the uncertainty over how our future trading relationship with the EU will be structured will increasingly start to concern the sector, which with have an inevitable effect on confidence.”