UK manufacturing continues its 'solid start’ to 2017

The PMI posted 54.6 in February – a three month low and down from December’s 30 month high – but remaining above the long-run average of 51.6.

Markit said that underpinning the latest increase in output was a further solid expansion of new order volumes.

Companies indicated that growth from the domestic market slowed, but noted a sharp acceleration in the rate of increase in new export business, with export orders rising for the ninth successive month in February.

In addition, Markit said job creation was registered for the seventh consecutive month, but there was a further sharp rise in purchase prices and output charges.

Rob Dobson, senior economist at IHS Markit, said: “The latest PMI signals that the UK manufacturing sector continued its solid start to the year. Although rates of expansion in output and new business lost impetus in February, growth remained comfortably above the long-run averages.

“The survey is signalling quarterly manufacturing output growth close to the 1.5% mark so far in the opening quarter which, if achieved, would be one of the best performances over the past seven years. The big question remains as to whether robust growth can be sustained or whether it will continue to wane in the coming months.”

Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, said: “There will be fears that the latest PMI data suggests the manufacturing sector is showing the first signs of slowdown since last summer as the UK prepares to begin in earnest the process of leaving the European Union.

“Yet despite persistent headwinds, principally the uncertainty around future trade terms and pricier imports as a result of the weaker pound, some exporting manufacturers are taking the opportunity to review their international trade strategies and look beyond the EU, especially taking advantage in the short term of the devaluation of sterling making our exports more competitive.”