UK manufacturing pulls back in January, Markit says

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LONDON (ShareCast) - - Total (NYSE: TOT - news) new orders rose only slightly
- New export orders continued to fall
- Input costs and output prices both increase


The Markit/CIPS purchasing managers´ index for UK manufacturing sector fell back a tad in January, to a reading of 50.8, following one of 51.4 for the month before.

The consensus estimate had been for the PMI to come in at 51.

Companies reported a marginal increase in new orders for the third successive month, which some attributed to improved inflows of new business from the domestic market.

That offset a further reduction in new export orders - due to weakness in mainland Europe - which fell for a thirteenth month in a row.

With new orders rising only marginally during the latest survey month, companies supported production volumes through the depletion of backlogs of work.

Outstanding business declined at a substantial pace. There were also reports of companies settling existing contracts from inventories, leading to a reduction in finished goods holdings for the tenth month running.

Average input prices rose for the fifth successive month in January, with costs rising across the consumer, intermediate and investment goods sectors.

Charges rose for the thirty-ninth successive month, although January's rate of inflation was below the average for the period of increase. A number of companies noted that generally subdued market conditions had restricted price rises.

AB