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Domestic demand lifts factories but exports fall

Factory, Domestic Demand Lifts Factories but Exports Fall - SantanderCB

Britain's factories had a better than expected start to the year, with solid domestic demand keeping big companies busy. The Markit/Cips purchasing managers' survey hit a three-month high in January of 52.9, up from 52.1 in December. However, export orders fell back into decline, with factories reliant on domestic spending and a backlog of previous orders to keep afloat. Rob Dobson, senior economist at Markit, said the detail in the survey showed that companies were still getting squeezed. 'The general operating environment has become increasingly competitive both at home and abroad as firms scramble to win new customers,' he said. According to Markit, the expansion of activity was being predominantly led by big groups, with SMEs remaining under severe pressure. Smaller companies were also likely to be hardest hit by the introduction of the new, higher minimum wage from this April. Lee Hopley, chief economist at the EEF manufacturers' organisation, said there were 'conflicting signals' in the data, and questioned whether the sector would regain momentum or if the survey fillip would prove to be a 'false signal'.

 

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