1 April 2011 | Lindsay Clark
Struggling with higher prices, UK manufacturers witnessed
slowing growth in March, a buyers’ survey found.
While still above the crucial 50 no-change mark, the
Markit/CIPS Manufacturing PMI recorded 57.1 last month, which was significantly
weaker than January’s record high of 61.2. February’s revised PMI was 60.9.
Growth of new orders eased sharply, especially at consumer
goods producers, while cost inflation led to output prices rising at a record high
rate, the report said.
Rob Dobson, senior economist at Markit, said: “Manufacturers
reported an unwelcome combination of slower growth and rising price pressures
“Although growth of production remained sufficiently strong
to generate another near-record increase in employment, the pace moderated
further from January’s high, linked to a slump in the rate of growth of new
orders, especially from domestic customers.
“At the same time, persistent high oil prices due to the
unrest in the Middle East and North Africa, rising global prices for many other
raw materials and higher import prices due to the weak pound all led to a
survey-record rise in prices charged by manufacturers,” Dobson said.
The mini-boom in UK manufacturing ran out of steam during
March, said CIPS CEO David Noble.
“Set against a strong order book across the whole of Q1,
it’s concerning to see inflows of new orders, particularly for consumer goods
within the domestic market, easing sharply at the end of the quarter.
“Inflation is still ‘enemy number one’ and the problem of
phantom demand, whereby purchasers buy greater quantities of scarce raw
materials to mitigate against further price rises, is continuing unchecked.
Selling prices have now hit record highs as businesses are forced to pass on these
costs directly to customers,” Noble said.