A slight revision lower but it just reaffirms a solid expansion as output growth returns last month following the omicron impact in December and January. Markit notes that:
"Against the immense supply chain struggles that manufacturers have had to contend with over the last few months, the latest survey data show some promising signs of resilience as goods production increased at the fastest rate since last July. What is also encouraging to read is the anecdotes from our survey members which suggest that the trend in demand for goods is gaining momentum and many expect this trend to continue. Additional workers were recruited in February (some on a short-term basis to cover staff isolating with COVID-19), and business confidence strengthened.
"There were also some cautious signs of optimism in supply chain data, with input lead times lengthening to the weakest extent for almost a year. According to panel members, the availability for certain raw materials had improved. It's important not to get too carried away though as there still needs to be a considerable catch-up here.
"Less positive remains the inflation story and the persistence of rising costs and output prices. Suppliers continue to raise their fees as demand for inputs remains strong, but it appears that many businesses are simply paying these prices and passing the burden onto their clients. Given the causes of inflation seem sticky, policymaker intervention may well be required to bring inflation under control."
