Manufacturing cools in April

Output from Britain’s manufacturing sector slipped to a 17-month low last month as production, new business and employment growth all cooled, a key survey yesterday showed.

The latest Markit/cips manufacturing purchasing managers’ index (PMI) revealed a reading of 53.9 for April, lower than the 54.9 recorded in March. Although any reading above 50 denotes growth the result was shy of the 54.8 expected by economists.

The weaker reading in part reflected a reduction in the pace of expansion of new work from abroad, with growth of new export business hitting a ten-month low.

Rob Dobson, director at IHS Markit, which compiles the survey, said: “The start of the second quarter saw the UK manufacturing sector lose further steam.

“The headline PMI dipped to a 17-month low as growth of production, new business and employment all slowed.

“While adverse weather was partly to blame in February and March, there are no excuses for April’s disappointing performance.”

He said the figures, coupled with the worse-than-expected GDP reading last week, made the prospect of an interest rate hike by the Bank of England “look increasingly remote”.

“On this footing, the sector is unlikely to see any improvement on the near-stagnant performance signalled by the opening quarter’s GDP numbers,” Dobson added.

Andy Hall, head of corporate banking, central Scotland, at Barclays, said: “Today’s data does point to a loss of momentum in the sector but that’s no reason to get carried away just yet.

“Manufacturers continue to report healthy order books from the ongoing improvement in global export markets and although challenges with the supply-chain are persisting, firms remain optimistic and, as they have proved time after time, are good at just getting on with business.”