Manufacturing orders continue to fall

3 March 2008
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03 March 2008 | Paul Snell

Activity in the manufacturing industry increased in February, despite a continuing decline in the number of new orders received by the sector.

According to the latest CIPS/NTC PMI report on manufacturing, where a figure above 50 represents growth, the industry recorded 51.3 in February. This was a rise compared with January's figure of 50.7.

But the number of new orders received remained below the no-change mark of 50 for the second month in a row, recording 49.9. The contraction was blamed on a sharp fall in orders for capital goods. Overall activity continued to grow because manufacturers continued with current work.

There was also an increase in output prices, as firms tried to pass on purchasing costs to their clients. Output prices recorded 59.9 in February, compared with 57.9 the previous month. Nearly 30 per cent of firms said they had raised prices in the past month.

Cost pressures also affected employment, falling for the second month in a row as firms reduced staff numbers because of cost pressures and poor market conditions. Although a slight rise compared with January's figure of 48.5, February's figure of 49.3 was still below the 50-mark.

Input prices also reached their highest level since November 2004, registering 72.2 last month. The rise was driven by higher costs for chemicals, metals, energy, oil, plastics and food products.

* Further coverage of PMI reports is available at http://www.supplymanagement.com/pmi



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