UK manufacturing growth slowed in January following Covid-19 disruption and transition's end

Tue 2 Feb 2021
Posted by: William Barns-Graham
Trade News

Manufacturing growth in the UK has come “close to stalling” due to disruption caused by both Covid-19 and the introduction of new trade rules following the end of the transition period, new data has found.

The IHS Markit/CIPS purchasing managers’ index (PMI) for January was 54.1, down from 57.5 in December indicating a slowing of momentum.

However, any score above 50 suggests growth in manufacturing output.

Steep falls

Rob Dobson, director at IHS Markit, said that while many countries were seeing manufacturers supporting economic growth, the UK’s sector had almost stopped.

“A mixture of harsher Covid-19 restrictions and Brexit led to near-record supply-chain disruptions, lower exports and increased costs. The impact was felt most by consumer goods producers, who reported steep falls in output and new orders,” he said.

According to the FT, January’s PMI was actually higher than predicted but supplier waiting times have extended to their longest levels in 30 years, largely as a result of new rules and restrictions following the end of the transition period. 

Collaboration urged

The majority of the UK’s manufacturers (61%) are “enduring supply chain disruption” as a result of the new rules, a survey by manufacturer trade association Make UK, reported in Lloyd’s Loading List, has found. 

Make UK has called on the government to work with the EU to fix border delays “as a matter of urgency”, including a suggestion to fast-track the training of customs agents.