Survey shows manufacturing beginning positively in 2012

A joint survey by Markit and the Chartered Institute of Purchasing and Supply has revealed UK manufacturing started 2012 on a positive footing.

The Markit/CIPS UK Manufacturing PMI is based on data from questionnaires sent to purchasing executives in more than 600 industrial companies. It showed an increase in the Purchasing Manager’s Index (PMI) from 49.7 in December 2011 to 52.1 in January 2012.

Rob Dobson, senior economist at Markit and author of the Markit/CIPS Manufacturing PMI, said: ‘January saw manufacturing kick-start back into life with output expanding at the fastest pace since March 2011 and new orders rising for the first time in seven months.’

He added that the latest figures show an improvement on the 0.9 per cent reduction in output seen at the end of last year.

‘Manufacturing was a key area of weakness which caused the UK economy to contract in the final quarter, so this surprising rebound in January means a return to recession is by no means a certainty,’ said Dobson.

Companies reported an increased willingness to spend among some UK clients and a further increase in new export orders.

Foreign demand rose amid reports of improved order inflows from clients in Brazil, China, the Middle East and the US.

David Noble, chief executive officer at the Chartered Institute of Purchasing and Supply, said it was too early to determine whether the positive trend is sustainable.

Noble told The Engineer: ‘I strongly feel that the sustainable growth of UK manufacturing is highly dependent on sustainable supply chains.

‘Understanding the risks in your supply chain and managing them in a professional way is vital if companies wish to avoid getting caught again by natural disasters such as the one in Japan last year.’

He added that this could be done through multi-sourcing and proper risk analysis.