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Exports shine in British manufacturing PMI figures: economists

0 Comment(s)Print E-mail Xinhua, February 4, 2014
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The British manufacturing sector continued to grow in January, according to statistics on Monday, and economists highlighted the strong exports component.

The Purchasing Managers' Index (PMI) figures for the manufacturing sector recorded a slight dip in January to 56.7 (above 50 is growth) from 57.2 in December.

Economists' consensus figure for January had been 57.3, and the figure is somewhat behind the 33-month high seen in November but is still well ahead of the average (51.3) for the series since it began in 1992.

Improved demand for British exports was reported from North America, mainland Europe, Asia, Brazil, Scandinavia and the Middle East.

The stand-out figure from the statistics was new export orders, which rose to 57.5, their highest level since February, 2011.

Suren Thiru, UK economist with the industry body the British Chambers of Commerce (BCC), told Xinhua Monday afternoon, "The overall figures are very encouraging, and it supports our own quarterly economic survey that shows, for example, an improvement in UK manufacturing."

"That again goes into the wider picture of an improving picture for the UK economy," Thiru added.

James Knightley, chief UK economist with ING Bank, said, "The new orders component (in the PMI figures) is very strong with export orders looking robust while production remains close to 60."

Knightley said the new orders figures backed up evidence from the BCC last month, as well as other recent surveys of boardroom sentiment, and will boost hopes that investment spending will finally start to pick-up and drive the recovery.

Knightley said it is also consistent with the ING Bank GDP growth forecast of 3 percent for 2014.

He added, "With employment continuing to fall, we suspect that wage pressures will gradually increase from very low levels through mid-year. As such, a Bank of England (BOE) rate rise this year is a growing possibility."

The poor weather Britain had experienced in January, including extensive flooding, had not had much impact on the figures, Simon Wells, chief UK economist with HSBC Global Research, said.

"This is good news for Q1 GDP. Overall, today's PMI continues to point to a good pace of expansion in manufacturing," said Wells.

The strong export figures were "encouraging given the need for the UK to narrow its current account deficit, although we think import growth is likely to be strong this year too," he added. Endi

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