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1 April 2014 | Paul Snell
Expansion of the UK manufacturing sector slowed in March reaching an eight-month low, according to the latest Purchasing Managers’ Index (PMI).
The Markit/CIPS PMI recorded a figure of 55.3 in March, compared with 56.2 in February, but was still above the baseline of 50 that indicates growth. The slowdown was attributed to lower output, particularly in the investment goods sector. The majority of new orders came from the domestic market, as new business from abroad rose at its slowest pace for 10 months.
But there was positive news for purchasers, as the ease in the rate of growth meant input prices fell for the first time in a year-and-a-half, with lower prices for energy and metals, and output charge inflation was at its weakest for seven months due to strong competition in the market.
“The latest Manufacturing PMI is likely to disappoint the markets, coming in more than a full index point below expectations, but it’s important to remember that this is in the context of super-strong, near-record growth rates seen in the second half of last year,” said Rob Dobson, senior economist at Markit. “Growth is merely hot, rather than scorching, and the take home messages from the March survey are that the recovery remains solid and continues to drive strong job creation.”
David Noble, group CEO of CIPS, said: “Although vendor delivery times are still lengthening, the rate of deterioration has stabilised, an encouraging sign that suppliers are responding to the pressure of increased raw material demand.”