U.K. manufacturers started the new year with a slower growth rate in January as growth in output and new orders slowed and price pressures intensified, purchasing managers' data from IHS Markit/Chartered Institute of Procurement and Supply showed.
The seasonally adjusted Purchasing Managers' Index stood at 55.3 in January, down from the December 2017 reading and the 51-month high in November 2017. Still, the January figure remained above its long-run average of 51.7.
Manufacturing production continued to grow at a solid pace, reflecting rising new order intakes, albeit the slowest in seven months. However, the rate of expansion in output declined to a six-month low.
January saw the trend in new export order inflows strengthen, with foreign demand improving at one of the quickest rates over the past four years.
One consequence of the upturn was an upsurge in price pressures, for input costs and selling prices, which rose at the quickest rate in 11 months and to one of the greatest extents in the history of the survey. Inflationary pressures picked up in the eurozone too, with both output charges and input prices rising at faster rates. Output price inflation in the eurozone accelerated to an 80-month high.
British manufacturers continued to have a positive outlook, with 55% of respondents projecting higher production in a year's time.
"The UK manufacturing sector reported an unwelcome combination of slower growth and rising prices at the start of 2018," IHS Markit Director Rob Dobson said. "Encouragingly, despite the slowdown, the latest survey is consistent with production rising at a solid quarterly rate of around 0.6% in January, with jobs also being added at a faster pace."
"Though the PMI showed continued growth, it was the weakest since June as shortages in commodities and raw materials resulted in a scrabble to complete goods, suppliers disappointed with longer delivery times and costs were on the rise again," said Duncan Brock, director of customer relationships at the Chartered Institute of Procurement & Supply.
