UK Final Manufacturing PMI Beats Estimates in Feb

The UK manufacturing sector activity expanded at a faster pace than expected in the month of February. Today’s survey showed that British factories recorded the slowest rate of production growth since May in February, as supply chain disruptions and rising costs linked to Britain’s withdrawal from the European Union and Covid-19 limited their ability to respond to a modest increase in orders.

The production component of the IHS Market / CIBS Manufacturing Purchasing Managers’ Index fell to 50.5 in February from 50.7 in January, the lowest level since May.

The broader index of manufacturing sector purchasing managers rose to a two-month high of 55.1 from 54.1 in January, slightly larger than the increase in the initial reading of 54.9.

But most of the increase reflects longer delivery times and higher costs, both historically linked to increased activity, but in recent times they have become a constraint.

Rob Dobson, Director at IHS Markit, commented on the survey

“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.”