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Latest data released by Markit – 1 March 2021
Business optimism reflected a sharp improvement though, jumping to a 77-month high with 63% of companies reporting that they expect better output in a year’s time.
Markit notes that:
“The UK manufacturing sector was again hit by supply chain issues, COVID-19 restrictions, stalling exports,
input shortages and rising cost pressures in February.
Look past the headline PMI and the survey reveals near stagnant production, widespread shipping and port
delays and confusion following the end of the Brexit
transition period.“In fact the biggest contributor to the headline PMI
reading was a near-record lengthening of supplier
delivery times. However, while normally a positive sign
of an increasingly busy economy, the recent lengthening
was far from welcome, more often than not linked to
problems resulting from Brexit and COVID related. The
resultant shortages for a vast array of components
and raw materials, as rising demand chased restricted
supply, led to a further acceleration in input cost
inflation to a four-year high.“With current constraints likely to continue for the
foreseeable future, pressure on prices and output
volumes may remain a feature during the coming
months. That said, improved domestic demand
as lockdown restrictions ease and a further rise in
manufacturers’ optimism are reasons to hope brighter
times are on the horizon, and have already supported
a modest rebound in staffing levels since the turn of the
year.”