Manufacturing output expands rapidly in early 2013

The expansion follows a further increase in new orders and ongoing efforts to clear backlogs of work. The labour market also continued to stabilise following the job losses seen through much of the middle of 2012.

At 50.8 in January, edging lower from December’s 15-month high of 51.2, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index (PMI) remained above the neutral 50.0 mark for the second month running.

According to a statement, this mainly reflected an increase in consumer goods production, although output also increased at intermediate goods producers. In contrast, investment goods output fell for the eighth time in the past nine months.

Companies reported a marginal increase in new orders for the third successive month, which some attributed to improved inflows of new business from the domestic market.

Clearing backlogs

This offset a further reduction in new export orders, which fell for the 13th month in a row. Companies linked lower volumes of new work from overseas to the ongoing weakness of markets in mainland Europe.