With positives few and far between, slowdown is disappointing

THE manufacturing sector has in recent times provided a little light amid the broad and deep UK economic gloom.

In the fourth quarter of last year, UK manufacturing output climbed by 1.3 per cent. This was in stark contrast to the 0.4% expansion eked out by the much-larger services sector and a 0.1% fall in construction output.

Overall UK growth in the fourth quarter was a very unimpressive 0.4%, as the economy continued to struggle.

With household finances under considerable strain against a backdrop of falling real pay and continuing austerity from the Conservative Government, things to cheer about, or even to breathe a sigh of relief over, are few and far between indeed.

So the apparent appreciable slowdown in UK manufacturing growth in the first quarter, highlighted in the Chartered Institute of Procurement & Supply’s latest survey of the sector published yesterday, is clearly a disappointment.

It is important to bear in mind that CIPS’S survey points to continued growth in the UK manufacturing sector, which appears overall to have been given a fillip by sterling’s postbrexit vote woes. A weak pound boosts UK exporters’ competitiveness in overseas markets.

However, CIPS’S survey does signal first-quarter growth in broad UK manufacturing activity, on its composite measure, was the weakest for any rolling threemonth period in the last year.

And growth of employment and new orders slowed significantly between February and March.

New orders, regarded as a good forward-looking indicator of a sector’s fortunes, increased in March at their weakest pace in nine months. What is more, growth of new export orders for UK manufacturers has eased to its weakest pace in five months.

The survey adds to a raft of other evidence justifying economic forecasters’ widely-held expectation that growth in the UK will remain weak relative to that in other advanced economies, as Brexit-fuelled inflation squeezes households and worries over impending departure from the European Union weigh heavily.