The UK manufacturing sector had a slightly better month than expected in April, though it slipped back into contraction territory, numbers on Wednesday showed.
The latest S&P Global UK manufacturing purchasing managers’ index fell to 49.1 points in April, from March’s 20-month high of 50.3. Falling below the 50.0 mark which separates growth from decline, the PMI suggests the UK manufacturing economy is now in contraction territory. The figure topped the earlier flash estimate of 48.7, however.
‘Four of the five PMI constituents (output, new orders, employment and stocks of purchases) registered contractions. Longer supplier delivery times was the only variable to buck the negative trend on the PMI. However, this was largely a ’false positive’, largely reflecting disruptions caused by the Red Sea crisis as opposed to stronger conditions driving up demand for raw materials (input buying activity actually fell during the latest survey month),’ S&P Global said.
‘The latest contraction of production volumes the thirteenth during the past 14 months was mainly the result of output being scaled back in both the intermediate and investment goods industries. The link between market demand and the trend in production was highlighted by these two sectors also seeing lower intakes of new business.’
New business weakened, with S&P Global noting poorer demand domestically and from overseas. New export business has now fallen for 27 months on-the-trot.
S&P Global added: ‘The continued subdued performance of the UK manufacturing sector was reflected in the labour market. Staffing levels were reduced for the nineteenth consecutive month. Job losses were mainly in the consumer and intermediate goods sub-industries, as employment rose in the investment goods category.’
The outlook for the sector remained ‘positive’, with just over half of firms predicting output will increase over the next year.
The manufacturing PMI survey panel features 650 firms. Responses were collected in the second half of the month.
On Friday, final UK service sector data is released.
The flash services PMI rose to 54.9 in April, figures last month showed, from March’s final tally of 53.1. The flash composite PMI, calculated using a weighted average of the services and manufacturing scores, rose to 54.0 points from 52.8 in March.
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