UK manufacturing growing steadily, but is it stable?

UK manufacturing growing steadily, but is it stable?

Latest statistics have revealed that UK manufacturing grew steadily in March but there are concerns about the stability of this growth.

The Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) showed a reading of 55.1 last month, which was higher than February’s score of 50. Anything above 50 tends to indicate growth, suggesting the future of UK manufacturing could be set to return to positive output levels despite a rocky start to 2018.

Figures revealed that output for UK manufacturing fell by 0.2% in February as the sector struggled to emerge from the depths of the recession.

The statistics came as a shock, especially given the fact that economists had forecast a 0.2% rise in industrial and manufacturing output in February.

The ONS had attributed this fall in performance to the bad weather that the UK has been subject to in recent months, although this is hard to quantify.

Kennedy Zvenyika, Managing Director of GIC Capital said: “The UK manufacturing industry seems to be moving in the right direction and is taking steps to reverse the damage that a fall in output at the start of the year contributed to.

“Despite these most recent positive figures, the construction industry has still contracted by 3% in the last year, with private house building being the only sector experiencing growth. Other sectors including the construction of infrastructures, such as road and rail projects, are down on this time last year.

“While the PMI figures are of course encouraging and 55% of manufacturing companies have forecast that their output will be higher in 12 months’ time, the lack of job creation this year means that the foundations for continuing growth in the manufacturing industry still seem somewhat unstable.”

Exports have also been steadily growing, but there are concerns that certain versions of Brexit that are currently in discussion could slash this figure by a third.

A paper by the UK Trade Policy Observatory has revealed that even if the government was to strike a free trade agreements (FTAs) with every other major country, it would still lead to falls in exports of 34%.

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