UK manufacturing PMI unexpectedly rebounds to 13-month highs of 55.1 in March

The UK manufacturing sector activity saw an unexpected upturn in the month of March, the latest survey report from IHS Markit showed this Monday. 

The seasonally adjusted IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) rebounded to thirteen-month highs of 55.1 in March versus 51.0 expected and 52.0 last.

Key Points:                

Stocks of inputs and finished goods rise at record rates

Trends in output, new orders and employment strengthen

Rob Dobson, Director at IHS Markit, commented on the survey:

“Manufacturers reported a surge of business activity in March as companies stepped-up their preparations for potential Brexit-related disruptions. Output, employment and new orders all rose at increased rates as manufacturers and their clients raced to build safety stocks. Stocking of finished goods and input inventories surged to new survey-record highs.”

“The stock-building boost introduces a major headwind for demand, output and jobs growth moving forward. Manufacturers are already reporting concerns that future trends could be constrained as inventory positions across the economy are unwound. The survey is also picking up signs that EU companies are switching away from sourcing inputs from UK firms as Brexit approaches. It looks as if the impact of Brexit preparations, and any missed opportunities and investments during this sustained period of uncertainty, will reverberate through the manufacturing sector for some time to come.”