Stephen Cooper, KPMG’s UK head of manufacturing, comments on the Markit/CIPS Manufacturing Purchasing Managers' Index (PMI), which continued to expand at 50.8 in January, following on from a positive Q4 in 2012:
“The UK manufacturing PMI figures are encouraging. While this starts the year on an optimistic note, the UK has tough domestic issues to contend with, and pressures to increase local output. UK GDP dropped to 0.3% in the last quarter of 2012, which means there was zero growth for 2012 as a whole. While there are ongoing initiatives by the UK government to encourage local production and foreign investment in UK manufacturing, these together with other domestic initiatives have yet to gain consistent momentum in boosting local production.
“In terms of Europe, the UK still has the shadow of the Eurozone debt issues looming over it, as the Eurozone is still the UK’s biggest export market.
“Looking at the wider global manufacturing sector, the US yesterday reported a 0.1 percent shrinkage in economic activity, which is the first contraction in recent months. With the US being a major world market, this is hopefully a temporary situation, as they reported that some of this contraction was due to weather-related disruptions.
“In Asia, the rise in China’s latest PMI for the third month in a row offers some hope as it indicates that factory output is accelerating, which may mean better economic performance for Asia in coming months, and may link through to an increase in UK exports to Asia.
“The UK manufacturing sector is contending with challenging domestic and global factors at an uncertain and fragile time for the global economy.”
Katrin Boettger, Senior PR Manager
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