- Rob Dobson, a senior economist at Markit
British manufacturing sector improved more than expected in January, supported by a steep surge in output at large manufacturers, while exports dropped. The Markit/CIPS manufacturing PMI rose to the highest level in three months of 52.9 in January, up from 52.1 in the preceding month, overshooting forecast for 51.6 as factories output soared at the fastest pace since June 2014. The performance of large-sized manufacturers was particularly positive, whereas growth was comparatively "mild" at small and medium-sized companies, the report showed. Furthermore, the sub-index tracking new orders also increased to 52.5, whereas the new export orders index stayed below the crucial 50-mark threshold and slid to the lowest level since June. There still appears to be plenty of spare capacity in many companies, with overall employment in the sector falling for the fourth time in six months.
The manufacturing sector failed to add to the UK economic growth in 2015. Moreover, analysts warned that positive January's data was likely to be short-lived as the sector is predicted to experience headwinds in the coming future. The most recent report from the Confederation of British Industries showed total factory orders fell between December and January, while a less volatile quarterly gauge improved in the three months through January.
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