British manufacturing staged a second month of fragile growth in January, with domestic orders stabilising and new export orders reviving in the face of a fragile global recovery.
The Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) came in at 50.1 in January, barely edging into expansion territory but right on the line between contraction and growth.
A positive reading for the sector over the last few months had raised hopes that Britain was on the road to growth after exiting the European Union in March, but fears of a so-called “no deal” Brexit have dashed any expectation that the UK could return to growth.
Rob Dobson, senior economist at IHS Markit, noted that export orders only grew at a slower pace in January than they did in December, pointing to a steadier export economy.
“In our view, this is a milestone in the stabilisation process in the manufacturing sector, as it is the first time in almost a year that month-on-month growth has topped the 50% mark”, he said.
“UK manufacturing has certainly not escaped the impact of weaker trade, with the output gap widening and export orders expanding at the slowest rate in five months, whereas domestic demand recorded its fastest growth since November last year.”
UK manufacturing output fell 0.4 per cent in the final three months of 2018, after contracting for two straight quarters following the Brexit vote.