Financial News: UK Manufacturing Activity Expands For First Time In

UK Manufacturing Activity Expands For First Time In 20 Months

04/02/2024 - 07:18:00 (RTTNews)

(RTTNews) - British factory activity showed tentative signs of recovery in March as output and new orders recovered, survey results from S&P Global revealed Tuesday.

The seasonally adjusted Manufacturing Purchasing Managers' Index, or PMI, rose to a 20-month high of 50.3 in March from 47.5 in February.

The flash score was 49.9. A reading below 50 indicates expansion in the sector.

Manufacturing output rose for the first time in more than a year, as production growth in the consumer goods sector more than offset downturns in the intermediate and investment goods categories.

New business rose slightly in March, which was centred on the domestic market. Meanwhile, export orders declined for the twenty-sixth successive month. British companies reported reduced demand from mainland Europe, with specific reference to France, the Netherlands, Belgium, and Poland.

On the price front, both input and output prices rose at a moderate rate in March. The rate of cost price inflation was the fastest for a year.

Delays in receiving and lower levels of purchasing efforts to reduce safety risks in the ordering of goods from supplier stocks and cash flow management initiatives led to further improvements during March, and stocks of purchases decreased.

Longer vendor lead times contributed to the Red Sea crisis, as diversions of freight and the knock-on effect on downstream supply chains led to extended delivery times.

Although levels of employment and purchasing activity continued to decline, rates of contraction eased noticeably at the end of the first quarter.

The majority of manufacturers remained confident about production over the next twelve months, reflecting signs of stronger demand, new product launches, a better trading environment, export opportunities, and hopes for cost and supply situations.

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