Manufacturing growth rate at a 15-year high
Mar 2 2010 by Peter McCusker, The Journal
THE recovery of the manufacturing sector remained on track after figures showed expansion at another 15-year high last month.
The Chartered Institute of Purchasing & Supply (CIPS) said production increased for the ninth consecutive month in February, with the rate of growth accelerating to match the previous month’s record.
Its monthly headline activity index, where a score over 50 registers growth, showed a reading of 56.6 – unchanged on January and the highest since October 1994.
CIPS said total new business rose at a rate close to January’s six-year high as firms benefited from successful product launches and clients rebuilding their inventories.
Growth of new export orders accelerated to its fastest since at least January 1996, with gains linked to higher sales in the United States and Asia and supported by the current weakness of sterling.
The good news follows results of yesterdays’ survey which shows North East manufacturers were feeling more optimistic than at any time since the start of the credit crunch, and comes at the start of Manufacturing Week.
CIPS chief executive David Noble said: “We’re really seeing signs that seem to point towards a full sector recovery.
“Most notably, companies reported that higher demand from export markets wasn’t just on the back of the softer sterling but also improving global market conditions.”
However, he warned the recovery was threatened by inflationary pressures, such as higher energy prices, and expected fiscal tightening.
Brian Thorpe, head of Barclays Corporate for the North East said: “The markers of recovery are taking hold in the manufacturing sector. The high growth rate evident in the figures represents a good start to 2010, building on the strength of January’s growth and moving beyond the long period of dead-calm felt within the industry up until the start of the New Year.
“With exports in the strongest position they have been for 14 years and output levels high, North East manufacturers will be optimistically looking towards consistent positive growth this year.
“With recovery gathering momentum however, it is still likely that we will see figures bouncing around in the near future as there remains unprecedented levels of uncertainty.
“There is Government focus on driving forward the agenda of UK manufacturing, a sentiment echoed across all parties, and although a lot will depend on fundamental effectors in 2010, including tax increases, VAT levels, and the election results, with continued support the sector will remain in a positive position.”
Manufacturing Week is aimed at debunking the myth that the UK has lost its manufacturing base.
