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February 1, 2013 11:20 am
Manufacturing activity continued to expand last month despite the snow, according to an influential poll of purchasing managers working in industry.
The purchasing managers’ index for UK manufacturers, compiled by Markit and the Chartered Institute of Purchasing & Supply, signalled that heavy snowfall had relatively little impact on activity.
Manufacturing PMI fell slightly last month, to 50.8 from 51.4 in December. The output figure strengthened to a 16-month high of 54.2. A figure above 50 indicates an expansion in activity.
David Tinsley, an economist at BNP Paribas, said: “With the snow in January it might have been possible to see a larger drop. With North Sea output rebounding, and utility production higher as people turn up their central heating following the chilly weather, overall industrial production should show a decent positive contribution to GDP.”
Some economists have warned that last month’s cold weather could heighten the risk of a triple-dip recession in the UK, if it gave rise to a contraction in output for the second successive quarter.
Manufacturing makes up a little over 10 per cent of UK economic output. Heavy snow three years ago was blamed for a 0.5 per cent contraction in output in the fourth quarter of 2010.
The PMI reading for new orders fell from 51.7 in December to 50.5 last month, signalling activity could fall in the months ahead.
Samuel Tombs, of Capital Economics, said: “While this year might not be quite as testing for manufacturers as 2012, today’s survey suggests that the chances of a sustained industrial recovery remain fairly slim.”
Meanwhile, fewer businesses and individuals went bust in the three months to December than in the previous quarter.
Figures from the Department for Business, Innovation & Skills showed that the number of company liquidations fell 3.3 per cent in the final quarter of 2012 to 3,834.
The number of insolvencies in the three months to December was more than 10 per cent lower than for the final quarter of 2011. The number of other corporate insolvencies also fell sharply to 1,007, 14.2 per cent lower than in the final quarter of 2011.
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