Engineering news
The recovery in manufacturing slowed further last month as weaker domestic demand subdued order books, according to the latest figures from Markit and The Chartered Institute of Purchasing and Supply (CIPS).
The Markit/CIPS Manufacturing Purchasing Managers’ Index fell to a seven-month low of 54.6 in April, down from a reading of 56.7 in March and well below January’s survey record high. The PMI, however, has remained above the neutral mark of 50 – which signals expansion – for 21 months.
Weaker growth of new business was centred on the domestic market. Manufacturers reported subdued consumer confidence and lower orders from the construction sector. David Noble, chief executive officer at CIPS, said: “The outlook for UK manufacturing is definitely bleaker than it was at the start of the year. The sector was racing ahead just a few months ago but there are now clear signs that it is running out of steam.
“Whilst the sector is still growing at a relatively healthy rate it is now so reliant on exports for growth that we have to be concerned about how sustainable this is. The marked slowdown in new orders in April will definitely send a shiver down the spine of many.” Rob Dobson, senior economist at Markit, said the outlook for manufacturing had “deteriorated sharply”.
In contrast to the domestic market, the growth of new export orders was substantial and gathered pace, CIPS/Markit said. Higher export orders were linked to improved demand from the US, Europe, China, Russia, the Middle East and Turkey. There were reports the ongoing global economic recovery, successful marketing activity and the historically weak sterling exchange rate had boosted exports.
April data indicated that increased output had been partly sustained through a marked reduction in backlogs of work. Outstanding business fell by the greatest extent since August 2010. There was a further marked increase in factory gate prices, with the rate of inflation slightly below March’s series record high. The principal factor driving up selling prices remained increased input costs. Purchase prices for raw materials rose reflecting increased costs for chemicals, food products, metals, oil, packaging and timber.