Positive start for manufacturers in 2018 despite further dip in optimism and rising cost pressures

Commenting on the IHS Markit/CIPS UK Manufacturing PMI for January, which slipped to 55.3 today – down from 56.2 in December – Duncan Johnston, UK manufacturing industry leader at Deloitte, said:

“This month’s result signals a positive start to 2018 in terms of production but weaker growth in orders. There are also signs that cost pressures are weighing on managers’ minds. Today’s result has fallen further from November’s 51-month high but remains above the 50 mark. It follows last month’s news of continued expansion of the manufacturing sector, which grew by 1.3 per cent in the fourth quarter of 2017.

“In the short term, the weak pound will continue to strengthen export demand but businesses must consider how they respond to inflationary pressures, which are now building.

“In the longer term, the biggest opportunities for manufacturers will come from advanced digital technologies to enhance production processes and develop engagement with end-customers. In order to do this effectively, businesses will need to comply with GDPR - particularly as manufacturers gain more access to customer data.”

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