PwC comments on the UK Manufacturing PMI for January

Commenting on the S&P Global UK Manufacturing PMI for January, 

Cara Haffey, Manufacturing and Automotive lead at PwC UK said:

“January’s Manufacturing PMI posted 47.0 in January, up slightly from 46.2 in December, but still signalling a deterioration in operating conditions in each of the past 18 months. 

“The prominent point to highlight from this month’s reading is how supply chains continue to be exposed to geopolitical events - which pose significant market disruption. As the PMI notes, Red Sea tensions led to a marked increase in average vendor lead times during January, as inputs ordered from overseas were re-routed and supplier performance deteriorated for the first time in a year. 

“With the PMI reporting that disruption to this key global trade route also contributed to supplier price increases and rising costs for chemicals, electronics, energy, food stuffs, metals, packaging and timber - this demonstrates the continued fragility of supply chains - and how operational resilience will continue to be a core focus for the sector.

“This news should ensure supply chains are prominent in the minds of UK board members, with a hope they are now more resilient than the past, given the learnings available from planning for Brexit, the response to the pandemic and dealing with chip shortages.  

“Manufacturers continue to remain optimistic, with a four-month high reading of business optimism. This should provide reassurance for the sector, but not distract from efforts to make operations and supply chains as secure and resilient as possible. The optimism linked to new products and economic recovery mirrors some results from PwC’s Executive Survey with Make UK, which indicated a similar level of cautious optimism in the sector, with more than half of manufacturers planning to seize opportunities in new products over the coming year, and more than a quarter (27.3%) hoping to explore uncharted territory, and expand into new markets.”