First there was the feared fallout from Brexit and what it would do to exports. This was quickly superseded by the effects of the Covid pandemic effectively shutting down many industries overnight, with the consequent knock-on effects on supply and demand throughout the supply chain.
Add into that global strain on supply chains and you have a recipe for a nervous and tentative approach to investment – never good news for the industry.
It was nice, therefore, to start 2022 with the relatively positive news that the manufacturing sector ended 2021 with further growth of production, new orders and employment.
These were the findings of IHS Markit/CIPS Purchasing Managers’ Index (PMI), which dipped slightly in December to 57.9 compared to 58.1 in November. A score of more than 50 indicates an expansion and the PMI has remained above the 50 mark for 19 months.
Output rose across the consumer, intermediate and investment goods sectors during December, with the overall pace of expansion improving to a four-month high. Increased output was underpinned by intakes of new business as the domestic market continued to strengthen.
Manufacturing employment increased for the twelfth successive month in December, with companies linking this to meeting improved demand, rising backlogs and efforts to address staff shortages.
Perhaps best of all, 63 per cent of companies predict that production will increase over the next 12 months, compared to six per cent anticipating contraction. Optimism reflected expectations of renewed global economic growth, planned investment and hopes for less disruption.
The news is not all good, of course. Logistic disruptions and staff shortages hindered the pace of expansion, while the spectre of inflation haunts the economy more broadly, but the fact remains that the market for manufactured goods remains robust and offers us all some reasons to be cheerful.
Bouncing back?
Uncertainty, concern and fear have dogged manufacturing industry in the past few years.
