Tough times for UK manufacturing

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UK manufacturing remained weak during January, despite showing a slight improvement on December, the latest Purchasing Managers' Index (PMI) shows.

The PMI figure rose to 35.8 from December's figure of 34.9, but was still at the third lowest level since the PMI series began in 1992.

Any figure below 50 shows a contraction in the manufacturing sector.

One major factor for the lowly showing of the index was the large number of jobs being cut in the sector.

A shortage of new orders and a diminishing number of backorders also dragged on the index.

'Appalling conditions'

An economist at Markit, which collects the data together with the Chartered Institute of Purchasing and Supply (CIPS), said the figures showed the difficult conditions experienced by the sector manufacturing.

"The latest PMI figures highlight the appalling market conditions that UK manufacturers are currently facing," said Rob Dobson.

"Although the PMI output index rose for the second month running in January, it was still consistent with production contracting by around 6% year-on-year.

"New orders are still declining at a near survey record rate, while the global downturn is making life tough for exporters - despite this being partly mitigated by the weaker sterling exchange rate."

But Philip Shaw, chief economist at Investec, saw a slight glimmer of optimism.

"The headline index bounced back against market expectations, although it is still at a low level," he said.

"These figures suggest manufacturing may have troughed in the fourth quarter of last year and conditions may be slowing starting to improve."