UK manufacturing grew at ‘snail’s pace’ in February, according to survey

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The UK’s manufacturing sector expanded at only a “snail’s pace” in February, according to the latest survey snapshot of the industry.

The latest Purchasing Managers’ Index reading dipped to 55.2 in the month, down from 55.3 previously and the lowest in eight months.

Any reading above 50 signals growth, but as recently as November the PMI for the sector was as at 58.4, a four-year high, as buoyant global demand and the weaker pound since the Brexit vote gave a lift to exports.

“The sector was not filled with bonhomie in the second month of the year. All sectors lost their drive as manufacturing activity crawled at a snail’s pace not seen for almost a year,” said Duncan Brock of the Chartered Institute of Procurement & Supply, which sponsors the PMI.

Lowest in eight months

Manufacturing accounts for around 10 per cent of UK GDP and was growing particularly strongly in late 2017, according to official data.

The Office for National Statistics estimates that output expanded by 2.7 per cent in the second half of last year alone.

Rob Dobson of IHS Markit, which compiles the PMI, said the index’s readings were consistent, on historic associations, with the pace of growth in the manufacturing sector dropping sharply in the first quarter of 2018 to 0.4 per cent, down from 1.3 per cent in the final quarter of 2017.

Separately, the Bank of England reported that mortgages approvals bounced back strongly in January, suggesting that the sharp drop recorded in December was a blip.

The Bank said there were 67,478 approvals in the month up from 61,692 in January and well clear of the 65,762 average of the previous six months.

It also reported a slight decline in the annual rate of consumer credit growth to 9.3 per cent, down from 9.5 per cent previously.

However the annual rate of credit card borrowing jumped from 8.9 per cent to 9.6 per cent, which will likely concern regulators at the Bank, who have been concerned about the possibility of a bubble in unsecured credit.