‘Light at the end of the tunnel’ for manufacturing industry, says Lancashire expert

A fourth consecutive month of growth in the manufacturing sector is an indication it is turning a corner despite ongoing geopolitical uncertainty, according to a Lancashire industry expert.

Ginni Cooper is partner at accountancy and advisory firm MHA, the UK member firm of Baker Tilly International, which has offices in Preston and Lancaster. She was speaking after the release of the S&P Global UK Manufacturing PMI (Purchasing Managers’ Index) data for January.

The monthly PMI survey is watched closely by businesses and the wider economy. It was 51.8 last month, a 17-month high and the fourth consecutive month the index has been above 50. A reading above 50.0 indicates manufacturing activity is growing while a score below 50.0 means contraction.

Ginni advises manufacturing businesses in Lancashire and across the North.

She said: “January’s PMI figures reflect a sector that is seeing light at the end of the tunnel. The PMI has risen for the fourth consecutive month, suggesting it is turning a corner. However, there are still signs that it is weighed down by uncertainty, particularly around the geopolitical arena, which continues to play on manufacturers’ minds.

“That uncertainty may already be denting sales, though if the index holds in the low 50s it remains a broadly positive signal for the start of the year.”

Ginni claimed while there was underlying optimism in the sector, stability would be key to giving manufacturers confidence to invest over the coming months.

“Rising energy costs and upward pressure on employment bills show no sign of easing, and the incoming Employment Rights Bill risks adding further regulation and red tape at a time when businesses are asking for support, not additional burden,” she said.

Ginni also highlighted that while the labour market had begun to even out, many manufacturers were not replacing roles that had been cut, accelerating a shift toward automation.

“But this requires significant investment - you can’t just rip up the factory floor overnight,” she added. “It’s still a challenging environment for UK manufacturing and ensuring policy decisions enable growth, rather than constrain it, will be critical in the months ahead.”