Thursday 4th March 2021 - 10:15 (GMT)
The manufacturing sector within the UK continued its recovery over February, pushing to 55.1 from 54.9 during the previous month. Primary drivers were increased confidence in post-Brexit trade with the European Union and also an uptick in global exports.
The news follows what was widely acknowledged as a positive budget for the manufacturing sector from UK Chancellor Rishi Sunak yesterday. An extension of the furlough scheme to September along with the doubling of apprentice incentive payments will help keep many businesses within the sector afloat.
And despite announcing an increase in corporation tax from 19% to 25% from 2023 onwards, the chancellor also included a £25bn “super-deduction” tax break for companies investing on infrastructure in what he called the “biggest business tax cut in modern history”.
Manufacturers have strong intentions to invest in capital equipment as well as digital and green technologies which are crucial for the UK's long-term recovery. Yesterdays announcement should help turbocharge investment to ensure that those plans turn into reality in the short-term. In the mid to longer-term it should also help provide a base that will support Government and industry’s efforts in achieving net zero and positioning the UK as a leader in digital manufacturing.
The pound continued to trade below its recent highs as concerns remain over some central banks ability to deploy further stimulus whilst keeping inflation near target levels. Both the European Central Bank and US Federal Reserve have both expressed concerns over missed inflation targets in recent weeks, leading to risk aversion creeping back into markets.
