The final IHS Markit/CIPS UK Manufacturing PMI® for January came in slightly ahead of the flash estimate (49.8) improving to the no-change mark of 50.0.
New orders, employment and business confidence all rose according to the latest survey but new export orders declined for the third consecutive month.
Manufacturing output rose in consumer and intermediate goods sectors, with production reported to be scaling up to meet the improved new work inflows. The downturn in the investment goods sector continued, however, with output and new work intakes declining sharply, albeit to a lesser extent than at the end of 2019.
UK manufacturers cited weak economic growth in key markets, especially Europe, as the reason for the continued decline in export new orders.
Business confidence improved with 47% of respondents expecting output to expand in the year ahead. Optimism was based on reduced political uncertainty, higher demand, plans for new product launched and expected recovery in export volumes.
Inventories of purchases declined at the fastest rate since May 2013, as companies reduced Brexit safety stocks and sought to improve their cash flow. Input buying volumes also fell for the third month running. Finished goods inventories rose marginally.
Input inflation intensified but remained modest.