Factory sector remains optimistic

Britain's factory sector grew more slowly than expected in February but still looks set to help the economy keep up its strong, post-Brexit vote momentum in early 2017, according to latest figures

The Markit/CIPS UK Manufacturing Purchasing Managers' Index (PMI) also showed a slight easing in inflation pressures, which had been rising at a record pace after the tumble in the value of the pound triggered by the decision to leave the European Union.

The overall manufacturing PMI slipped to 54.6 from 55.7 in January, below the median forecast of 55.6 in a Reuters poll of economists.

John Pitchford, Head of Corporate Banking for Barclays in Shropshire (pictured), said: “Two months into 2017 and despite a slowing in the rate of growth in February, manufacturers continue to register strong levels of output, healthy order books and growing trade courtesy of a weak sterling. 

“However, despite the recent surge in exports, the sector continues to rely mostly on domestic demand and with price rises feeding through on the back of growing input costs, even with their recent easing, inflationary pressure continues to hover with intent. 

“It’s how manufacturers now respond, particularly in their investment intentions, that will help determine how long the raised level of optimism in the sector continues.”