UK Manufacturing Grows Despite January Tailwinds

Britain’s manufacturing sector continued to expand output in January despite the tailwinds of Brexit and the Covid-19 pandemic, new survey data has shown.

The HIS Markit / Chartered Institute of Procurement and Supply (CIPS) Purchasing Managers Index for the month gave a reading of 54.1. Anything over 50 indicates growth.

While the sector remained in a state of growth, it was the weakest Janaury in three years, with survey respondents identifying the pandemic and Brexit as key causes of the sluggish picture.

Both factors hampered manufacturers by placing supply chains under strain, both as firms got used to new rules and paperwork and the UK faced the legacy of travel constrains aimed at curbing the transmission of the variant of Coronavirus first identified in Kent.

Despite this, the need for industrial machine parts is still likely to grow, as January was the eight successive month of growth in the UK manufacturing sector, albeit the joint weakest in that sequence.

Commenting on the survey, HIS Markit director Rob Dobson said the main hope for the sector now is “that the current constraints will start to ease once COVID-19 restrictions are lifted, vaccines are rolled out and ports, suppliers and manufacturers adapt to the new trading environment post-Brexit”.

He predicted that if this happens, the sector will be able to sort out “bottlenecks” going forward and growth levels should recover well.

CIPS group director Duncan Brock said the January figures were a “damp squib”, but noted the positive data on manufacturing employment, which rose for the first time in a year. He said more growth in jobs could be “driven by the impetus from vaccine programmes”.

The vaccines being made in the UK may be a major factor in both manufacturing output and employment, plus the opening up of society as the benefits of the jabs are felt across society.

Work began last week on making the vaccines for French firm Valneva at a plant in Livingston near Edinburgh, with the UK ordering 40 million doses.

The vaccine is being made in anticipation of successful trial results, a similar process to that undertaken by AstraZeneca last year.

If the data does prove the efficacy of the jab it is likely to be approved later this year.