Manufacturing PMI increases for second consecutive month but ongoing decline in export orders continues to be a thorn in the side - ITEM Club
Nida Ali, economic advisor to the Ernst & Young ITEM Club, comments on today’s PMI manufacturing figures:
An encouraging start to the new year, with initial signs of improvement in the domestic market
But the ongoing decline in export orders continues to be a thorn in the side for UK manufacturers
Although manufacturing will probably contribute to growth in Q1, GDP growth is still expected to remain flat
“An encouraging start to the new year, with the manufacturing PMI reporting an increase in activity for the second consecutive month. Signs of an improvement in the domestic market, particularly the increase in new orders, are a welcome turnaround from the weak trends seen last year.
“The ongoing decline in export orders continues to be a thorn in the side for UK manufacturers. Although today’s figures indicate that stronger momentum is building into 2013, the key question now for manufacturers is the degree to which greater signs of stability in the Eurozone and the fiscal agreement in the US translate into stronger export demand. If export demand begins to strengthen, we should see the start of a sustainable recovery in the manufacturing sector.
“Today’s figures suggest that manufacturing will probably contribute to growth in first quarter. But with the sector accounting for a relatively small share of the UK economy, GDP growth in Q1 is still expected to remain flat.”
For further details please contact:
Rosanna Lander Ernst & Young Media Relations Manager +44 20 7951 6430 07786 661754
Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.