Source: IHS Markit
The Purchasing Managers’ Index, gauging the manufacturing activity in the UK, reached a three-month high of 58 in February, higher than 57.3 in the previous month. FTSE 100 is down -0.60%, GBPUSD is down -0.16%.
- The improvement in manufacturing activity happens even as the UK economy experiences higher domestic demand, amid easing global supply chains and lowering material costs.
- Output in manufacturing and new orders increased across the board in consumer, investment, and intermediate goods categories.
- New export business, however, fell for the fifth straight time in six months, with the slowdowns connected to Brexit-related issues, pandemic restrictions, and lost trade due to long delivery times.
- Employment increased for the fourteenth straight month to maintain levels above the long-run average, although the rate was lower than January.
- Backlogs of work declined for the first time in 16 months, while average lead times rose for the thirty-second straight month.
- Inventories of finished goods increased slightly for the first time in more than two years, with companies accumulating stocks to guard against supply chain bottlenecks.
- Input and output inflation remained among the highest ever, although the rate eased from the recent highs.
- Manufacturing optimism remained, with almost 64% of firms expecting a rise in output in the next 12 months. The degree of optimism was at a six-month high in February.