UK manufacturing production growth accelerated to its strongest for 10 months in February

According to the report from IHS Markit / CIPS, manufacturing production growth accelerated to its strongest for 10 months in February, helping to offset a slight loss of momentum in the service economy.

The seasonally adjusted IHS Markit / CIPS Flash UK Composite Output Index - which is based on approximately 85% of usual monthly replies - was unchanged at 53.3 in February and comfortably above the 50.0 threshold that separates expansion from contraction. Moreover, the latest reading pointed to the joint-fastest expansion of private sector output since September 2018 (equalling that recorded in January). Survey respondents noted that receding political uncertainty since the general election continued to translate into higher business activity and greater willingness to spend among clients. That said, the overall rate of new order growth eased from the 19-month peak seen in January amid a weaker expansion across the service economy.

There were a number of reports from service providers that the COVID-19 outbreak had weighed on overseas bookings and resulted in the cancellation of some orders from clients in Asia, particularly those based in mainland China. Manufactures also commented on a headwind from extended shutdowns in China, with stocks of inputs falling at the fastest pace for over seven years and vendor lead times lengthening to the greatest extent since March 2019. Moreover, the sevenpoint drop in the suppliers' delivery times index since January signalled the largest month-on-month slide in supply chain performance since the survey began in 1992, exceeding the previous record seen during the UK fuel protests in September 2000.