This is according to the seasonally-adjusted IHS Markit/CIPS Purchasing Managers’ Index (PMI). Read last month's PMI index report here.
Supply chain disruptions were rapidly emerging, however, as the outbreak of Coronavirus (COVID-19) led to sizeable raw material delivery delays, rising input costs and increased pressure on stocks of purchases.
The index rose to 51.7 in February, up from 50.0 in January, but below the earlier flash estimate of 51.9. The PMI posted above the 50.0 neutral mark for the first time in 10 months.
Business optimism also strengthened, hitting a nine month high, reflecting planned new investment, product launches, improved market conditions and a more settled political outlook.
February saw the level of new work received expand for the second successive month. The rate of increase accelerated to an 11-month high as reduced levels of political uncertainty and successful promotional activities aided a further recovery in domestic market strength.
Less positive news was provided by the trend in new export business, with overseas demand decreasing for the fourth successive month in February.
The virus outbreak had a noticeable impact on supply chains during February. Average vendor lead times lengthened to the greatest extent since July 2018, while the eight-point drop in the level of the seasonally adjusted Suppliers' Delivery Times Index was the largest in the 28-year survey history.
Commenting on today’s data, Seamus Nevin, chief economist at Make UK, said: “Manufacturing emerged from its longest decline since the 2008 Financial Crisis in January, and the reduced levels of political and global trade uncertainty are continuing to bring improvements in manufacturing performance and confidence as we get further into the new year.
“Domestic performance is rebounding. However, there are emerging signs that the coronavirus is impacting on industry while the downward trend in new export orders is a growing concern. Coming as it does on the day the UK kick-starts our future trade negotiations with the EU and US, all eyes will be on the nature and quality of any trade deals secured over the next eleven months.”
Markit Economics www.markiteconomics.com
Make UK www.makeuk.org