UK Manufacturing PMI Rose To Record High Level At 62.0
UK manufacturing PMI rose to survey record high at the start of 2011. Rates of expansion in UK manufacturing new orders and employment accelerated to reach levels without precedent in the nineteen-year survey history in January, leading to near-record growth in output.
However, inflationary pressures continued to build, as input costs and output prices also rose at, or near to, series record highs. At 62.0 in January, from an upwardly revised reading of 58.7 in December, the seasonally adjusted Markit/CIPS UK Manufacturing PMIï¿½ rose to a record high. The PMI has remained above the 50.0 mark throughout the past year-and-a-half.
Manufacturing production rose for the twentieth consecutive month in January, underpinned by faster inflows of incoming new work. Growth of output hit a survey record high in the consumer goods sector, but also accelerated at both capital and intermediate goods producers.
Companies reported improved demand from both domestic and overseas markets, while new product launches, successful promotional activity and client restocking also contributed to new order growth. The rate of increase in new export orders was amongst the fastest in the series history. Latest growth reflected higher sales to the US, emerging markets, Scandinavia and Australia.
Manufacturing employment increased for the tenth successive month in January. Companies linked jobs growth to rising production requirements, improved market conditions, business development and the launch of new product lines. Part of the increase reflected efforts to combat rising levels of outstanding business, as backlogs accumulated for the third month in a row.
Inflationary pressures continued to build in January, with substantial increases signalled for both input costs and factory gate prices.
Average purchase prices rose at the steepest pace in the survey history, with over three-fifths of companies reporting an increase. Manufacturers indicated a vast array of inputs had risen in price, including chemicals, cotton, energy, food products, metals, packaging, paper and timber.
Average output prices rose for the fifteenth successive month in January, mainly reflecting increased input costs. This was further highlighted by the sectors reporting the steepest inflation of output prices – Chemicals & Plastics, Timber & Paper, Food & Drink and Textiles & Clothing – also seeing the sharpest increases in costs.
Rising output requirements and efforts to protect against expected future price increases led to a near survey record increase in purchasing activity. Subsequently, holdings of raw materials rose at the quickest rate since data were first collected in January 1992. Meanwhile, stronger demand for raw materials led to a marked increase in vendor lead times, as sellers markets continued for certain inputs.