03 May 2005 | Gareth Mytton
The UK manufacturing sector contracted in April for the first time in nearly two years, according to the latest purchasing managers' index (PMI).
The overall PMI - a composite indicator of sector conditions from CIPS and NTC Research in which 50 indicates no change on the previous month - fell to 49.5, from 51.6 in March.
Input price inflation maintained its recent decline, falling to 62.5, the lowest in more than a year. High prices for oil, steel, plastics and timber fuelled the rise.
However, the quantity of purchases index rose marginally, while the stocks of purchases remained at 46.1, the same as in March. Delivery times worsened again, but more slowly than before as falling demand for raw materials eased pressure on suppliers.
Growth in output was marginal. Most companies reporting a rise attributed it to starting work on previously agreed contracts, as both new orders and new exports fell (49.2) on March's figures.
Activity also fell in the euro-zone, where NTC Research put the manufacturing PMI at 49.2, down from March's 50.4.
But the US manufacturing sector managed to expand in April, according to the Institute for Supply Management's (ISM) manufacturing report on business. Although the PMI of 53.3 was lower than March's figure, it completed the longest continuous expansion in manufacturing activity in 16 years.
• Coverage of previous months' manufacturing, construction and services PMI reports is available at http://www.supplymanagement.com/pmi
• More information on the UK and euro-zone PMIs is available at www.ntc-research.com
• The full text of the ISM reports on the US manufacturing economy for April and previous months is available at http://www.ism.ws/ISMReport/index.cfm.