In January British factory output continued to fall as manufacturers warned that cost inflation has hit a two year high.
The S&P Global UK manufacturing PMI survey recorded a reading of 48.3 in January from 47 in December, anything above 50 shows that activity is growing.
Manufacturers also warned that rising costs and the Chancellor’s tax increases announced in the Autumn Budget is causing further cost pressures.
Rob Dobson, director at S&P Global Market Intelligence said that larger companies have “fared better, seeing output and new orders recover during January” compared to smaller businesses.
He added, “There nevertheless seems little scope for any imminent improvement in performance across the board.”
The increase into employers’ national insurance contributions and the minimum wage will hit companies when it comes in to affect in April.
Dobson added, “Business optimism consequently remains close to December’s two-year low, while input price inflation has spiked to a two-year high.”
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