Meanwhile, foreign client demand continued to rise marginally. A sustained upturn in new orders led to a further rise in employment, with backlogs also increasing.
At the same time, inflationary pressures softened in February. Rates of both input price and output charge inflation eased from January, with the former edging down to an 18-month low.
Midway through the first quarter of 2019, manufacturing firms indicated a solid, albeit softer, improvement in the health of the sector, with the index registering its lowest level for 18 months.
Production increased further in February, albeit at a slower pace. Panellists reported that the upturn stemmed from a sustained expansion in new business and efforts to clear backlogs. That said, the rise in output was modest overall, with growth the softest since September 2017 and below the long-run trend.
Similarly, new business received by manufacturers expanded at a slower rate in February. The modest upturn was the weakest since June 2017. Although panellists stated that firmer client demand drove the latest increase, some firms noted that longer lead times were pushing clients to find alternatives. Foreign client demand, however, continued to increase. Though marginal, the rise in new export orders quickened since January.
On the price front, input cost inflation eased to an 18-month low in February. The increase in purchasing prices was nevertheless sharp, reflecting higher raw material costs and tariffs. Factory gate prices rose solidly, albeit at the secondslowest rate since December 2017.
The rate of job creation was faster than the series trend in February, with firms raising their workforce numbers solidly. Pressure on capacity was exhibited by another monthly rise in backlogs of work. Although only fractional, the latest increase extends the current sequence of order book accumulation to 19 months.
A slower rise in new business reportedly led to softer growth in buying activity. Growth in pre-production inventories also eased in February as stocks of inputs were used in production.
Finally, expectations towards the one-year outlook for output remained positive in February. Panellists were buoyed by forecasts of further upturns in new business. That said, the degree of confidence slipped to the second-lowest since November 2016 (behind December 2018).