Latest PMI Reports Highlight Growth In Two Important Sectors

Manufacturing and construction businesses continued to recover last month, with new purchasing managers' index (PMI) figures highlighting an upturn in activity in both industries.

The last few years have been very difficult for companies of all sizes operating in these sectors, but output has been on the rise since 2013.

According to the UK Manufacturing PMI published by Markit and the Chartered Institute of Purchasing and Supply (CIPS), operating conditions improved for the 11th consecutive month in February 2014.

The barometer posted a score of 56.9 last month, which was up from 56.6 in January. Any reading above 50 represents growth.

Meanwhile, employment growth in the manufacturing industry rose at its fastest pace since May 2011, as more firms attempted to clear backlogs of work.

Markit senior economist Rob Dobson said this upturn has been largely driven by strong domestic demand, as export activity has been somewhat disappointing.

He commented: "The Manufacturing PMI ticked higher in February to provide welcome reassurance that the sector has weathered the storms and flooding in parts of the country during the month.

"Growth of production and new orders lost only a little momentum and are still rising at above trend rates."
Markit and CIPS released a separate report for the building industry, which showed job creation hit a three-month high.

The UK Construction PMI posted a score of 62.6 in February. Although this was slightly down on the 77-month high of 64.6 in January, it was still an impressive result and provided confirmation that building activity has been on the up since May 2013.

David Noble, chief executive officer at the CIPS, said the recent spell of bad weather restricted growth in the construction field, but a record increase in civil engineering work has helped to support the industry.

He added that firms have been buoyed by improving market conditions and the slight slowdown in February will be a temporary blip.

Expert Opinion

It is fantastic news to see both the construction and manufacturing sectors continue their recovery, with these figures being a further example of the continued improvement being seen in the economy. <br/> <br/>"Small businesses are very active in both of these areas so they will have no doubt benefitted from the opportunities which are continuing to arise in this respect, meaning they could be looking to a brighter future and the prospect of further prospects arising. <br/> <br/>"While companies should embrace this, it is vital they also ensure they have the right support network in place to help them move forward. Legal advice is a particular necessity." Fergal Dowling - Partner