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Highlights
- Manufacturing PMI stood at 58 in the month of February, hitting a three-month high following solid demand recovery and ease in supply chain pressure.
- The optimism amongst the manufacturing industry was at six months high during the period, with 64% of respondents predicting production increase.
The UK manufacturing sector expanded in February 2022, according to the latest data released by IHS Markit. Manufacturing Index (PMI®) increased to 58 in the passing month, up from 57.3 in January, and hit a three-month high following solid demand recovery and ease in supply chain pressure. After the Covid-19 pandemic, the UK manufacturing PMI improved significantly, staying above the neutral mark for 21 straight months. The PMI reading above 50 indicates expansion.
While the growth rate of UK manufacturing production accelerated to a seven-month high, the optimism amongst the manufacturing industry was at six months high in February, with 64% of respondents predicting a production increase in the coming year. The positive PMI reading has come despite elevated input price inflation across the sector.
Encouraging PMI numbers indicates a positive outlook for the manufacturing sector companies. Let us look at FTSE listed manufacturing companies and their growth prospects:
BAE Systems Plc (LON: BA.)
FTSE100 listed defence and aerospace company manufactures weapons and defence-related products and provides technology solutions to its client. It operates through five segments and manufactures combat vehicles & aircraft. The company’s stock witnessed a positive buying sentiment from investors since the start of the Russia-Ukraine war. The share price has been up by over 24% since 1 February 2022.
In addition, the company also reported a positive financial result for the year ended 31 December 2021. Its total sales were up by 5% to £21.3 billion.
BAE Systems Plc currently trades at GBX 735, up by 2.14% on 01 March 2022 at 12:30 pm GMT+1, with a market cap of £22,641 million.
Weir Group Plc (LON: WEIR)
The company manufactures and sells engineering equipment used in the mining and infrastructure segment. The economic recovery after the pandemic has resulted in strong demand for the company’s products leading to solid growth in the order book.
Also, the company recently completed the £89 million acquisition of Motion Metrics, an AI-based developer of technology products used in mines.
Weir Group Plc currently trades at GBX 1,524, down by 3.70% on 01 March 2022 at 12:30 pm GMT+1, with a market cap of £4,108 million.
Rolls-Royce Holdings Plc (LON: RR.)
The leading industrial technology company has a major operation in the defence and aerospace segment. It majorly provides aero engines and related maintenance services to the airlines’ industry.
The company’s major source of revenue is the aerospace segment. For the 12 months ended 31 December 2021, the company reported total revenue of £11,218 million, out of which the aerospace segment contributed £4,536 million to total revenue.
Rolls-Royce Holdings Plc currently trades at GBX 98.69, down by 4.65% on 01 March 2022 at 12:30 pm GMT+1, with a market cap of £8,660 million.
