Brexit Britain's manufacturing returns to growth after 20 months of decline

Britain’s manufacturing sector returned to growth in March, its first positive month in nearly two years, according to a closely watched economic indicator.

The S&P Global / CIPS purchasing managers index for the manufacturing sector produced a 20 month high reading of 50.3 last month, versus 47.5 in February. A PMI score above 50 indicates that activity in an economic sector is increasing, while a score below points to contraction.

Financial ratings and data group S&P said that three of the PMI manufacturing index’s sub-components, new orders, output and suppliers’ delivery times, saw an improvement in March, which has led to confidence levels rising.

Around 58 percent of companies expect their output to rise over the coming 12 months, an 11-month high. On the other hand, seven percent predict a contraction, while the rest see no change.

“The end of the first quarter saw UK manufacturing recover from its recent doldrums. Production and new orders returned to growth, albeit only hesitantly, following yearlong downturns, with the main thrust of the expansion coming from stronger domestic demand,” S&P director Rob Dobson said.

“We’re also seeing signs of stabilisations in employment and purchasing activity alongside a move towards lowering safety stocks, all signs that manufacturers are tentatively optimistic about the road ahead.”