UK’s manufacturing PMI rises to 52.9 in January

UK's headline manufacturing PMI for January rose 0.8 points to 52.9, on par with Barclays forecast, from an upwardly revised 52.1 in December. Manufacturing output recorded the sharpest acceleration since 2014. Moreover, new orders rise 0.2 points to 52.5; however, this is likely to have been driven domestically.

According to Markit Press Release, companies have stated that a strong GBP, in spite of recent decline, is still depressing their capability to be competitive in markets globally. Markit Press Release has stated that the operating environment has driven the companies to be more price competitive in a bid to gain new businesses.

"Despite today's positive headline and output index, we remain cautious on manufacturing in light of a lack of broad-based continued improvement across subcategories", says Barclays.

The output index rose to 58.6 in January, whereas new orders rose to 52.5. Its subcomponent new export orders fell by 1.8pts to 48.9. Meanwhile, the employment index dropped 3 points to 48.3. In terms of sectors, the rise in January's headline was mainly due to consumer goods and investment, which rose to 54.1 and 52.9 respectively.