Fall in export orders slows UK manufacturing growth

1 May 2012

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1 May 2012 | Paul Snell

The UK manufacturing sector continued to grow in April, but at the slowest rate seen this year.

The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) for April recorded a figure of 50.5, still above the no-change mark of 50 indicating growth, but a slowdown when compared with the revised figure of 51.9 recorded for March.

The slowdown was blamed on a significant fall in the number of new export orders, which fell to its lowest level since March 2009 due to lower demand in mainland Europe, the US and east Asia.

“What manufacturers really need to see is a marked improvement in new order inflows, so April’s sudden sharp drop in new export orders was a real disappointment,” said Markit senior economist Rob Dobson. “It seems that weaknesses in our major trading partner, the Eurozone, are starting to hit home, especially for consumer goods producers.”

More positively, employment increased for the fourth month in a row driven by increased output.

The sharp rise in input prices seen in March also eased slightly, but buyers still reported higher costs for chemicals, eggs, feedstock, metals and oil. Some suppliers were also passing on higher transport costs to customers. This was reflected by output charges rising at their fastest rate in seven months.

“This month’s slower increase in input prices is likely to offer some relief, with many manufacturers being forced to respond to last month’s rising oil prices by passing on costs at the highest rate for seven months despite increased market competition,” said CIPS CEO David Noble.

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