UK Final Manufacturing PMI beats estimates with 55.1 in Feb, GBP/USD off the lows

The UK manufacturing sector activity expanded at a faster pace than expected in the month of February, the final report from IHS Markit confirmed on Monday. 

The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) was revised higher to 55.1 in February versus 54.9 expected and 54.9 first readout.

The figure climbed to a two-month high amid the upward revision.

Key points              

Growth subdued by stretched supply chains and rising costs.

Business optimism rises to near six-and-a-half year high.

Rob Dobson, Director at IHS Markit, commented on the survey

“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.”

GBP/USD reaction

The GBP bulls found some support from the upbeat UK Final Manufacturing PMI, as GBP/USD jumped back on the bids, having hit a daily low of 1.3927 pre-data release.

The spot was last seen trading at 1.3940, up 0.06% on the day.