Growth in the UK manufacturing industry slowed to the lowest level so far this year, the latest PMI reports.
The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to a 27-month low of 53.9 in April, down from 54.9 in March.
“While adverse weather was partly to blame in February and March, there are no excuses for April’s disappointing performance, making the chances of a near-term hike in interest rates by the Bank of England look increasingly remote,” said IHS Markit director Rob Dobson.
According to the monthly survey of buyers, slower growth of output, new orders and employment reflected weakening expansion of new work from abroad. Growth of new export business slowed to a 10-month low.
“Any hopes for an improvement to last month’s steady if unremarkable pace were dashed in April as new order growth was the slowest for 10 months and the consumer goods sector was particularly hit, reporting the first job losses since February 2017 and the fastest drop in hiring for six-and-a-half years,” said CIPS group customer relationship director Duncan Brock.
This slowdown translated into a dip in business optimism to a five-month low.
Manufacturing production rose for the 21st month in a row. Growth was driven by a combination of higher intakes of new business, stronger client confidence, improved weather, new product launches and increased capacity.
In addition, manufacturing employment also increased this month, as staffing levels rose in the intermediate and investment goods sector.
Higher purchasing costs were attributed to increased commodity and raw material prices, in some instances exacerbated by demand exceeding supply.
In general, inflationary pressures eased: on the price front, input cost and output charge inflation moderated and, even if still high, they are below the levels seen at the turn of the year.
Brock concluded: “It appears the disappointing start to the year is set to continue in the second quarter.”
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