–Survey Also Shows Record Employment Growth, Cost Pressures
–PMI Activity Index At 62.0 Vs Rev. Dec 58.7; MNI Median 58.0

LONDON (MNI) – UK manufacturing activity expanded in January at its
fastest rate since the Markit/CIPS purchasing managers’ survey began
in 1992.

Markit/CIPS also reported rising cost pressures and the fastest
rise in employment in the sector also since the survey began.

The headline activity index reading of 62.0 was well above the MNI
median forecast of 58.0 while the December PMI was also revised higher,
up to 58.7.

Input costs and output prices also rose at, or near to, series
record highs.

Markit/CIPS noted that the PMI has remained above the 50.0 mark
throughout the past year-and-a-half. Manufacturing production rose for
the twentieth consecutive month in January, with new order levels also
at a series high.

Growth of output hit a survey record high in the consumer goods
sector, but also accelerated at both capital and intermediate goods
producers.

Markit/CIPS cited improved demand from both domestic and overseas
markets, new product launches, successful promotional activity and
client restocking as factors in the strength of the sector.

The rate of increase in new export orders was also amongst the
fastest in the series history. Higher sales to the US, emerging markets,
Scandinavia and Australia were also recorded. Manufacturing employment
increased for the tenth successive month in January. Companies linked
jobs growth to rising production requirements, improved market
conditions, business development and the launch of new product lines.

Rob Dobson, Senior Economist at Markit and author of the
Markit/CIPS Manufacturing PMI:

“Manufacturers made a record breaking start to 2011, confirming
that the sector remains one of the brighter spots of the UK economy. New
orders and employment both rose at survey record high rates, while
output expanded at the fastest pace since the mid-1990’s. Robust demand
was supported from both the domestic and overseas markets, suggesting
that what we are seeing is not just an export orientated recovery, but
there are also signs of life in domestic consumer and business spending.

“Manufacturers are still being buffeted by rising cost pressures,
however, with raw material prices rising at the steepest pace since the
survey began in 1992. Increasing signs of these costs are being passed
down the supply chain in the form of higher factory gate prices, the
hackles of the hawks on the Bank of England’s Monetary Policy Committee
will no doubt be raised.”

–London newsroom: 4420 7634 1624; email dthomas@marketnews.com

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