Financial News: UK Manufacturing Downturn Continues In April

UK Manufacturing Downturn Continues In April

(RTTNews) - The British manufacturing sector contracted further at the start of the second quarter, as output and new orders fell amid headwinds of client uncertainty, destocking, and tightening cost controls, survey results from S&P Global revealed Tuesday.

The Chartered Institute of Procurement & Supply manufacturing Purchasing Managers' Index, or PMI, edged down to 47.8 in April from 47.9 in March. The <a href=https://www.rttnews.com/3357664/uk-private-sector-growth-hits-1-year-high.aspx target=_blank >flash estimate was 46.6</a>.

The PMI reading has remained below the neutral 50.0 for the ninth successive month.

Production, new orders, employment and stock purchases all contracted, while vendor lead times improved, the survey said.

Total new orders decreased at the quickest pace in three months in April, linked to increased client uncertainty, customer destocking, and efforts to control costs.

New export orders contracted for the fifteenth successive month due to softer demand from the US, China, and mainland Europe.

Manufacturing employment declined at the weakest pace since the current sequence of falls started in October last year. 

On a positive note, the rates of rise in average input costs and output charges both fell to 35- and 28-month lows, respectively, in April.

The softer rise in costs was attributed to reduced supply chain pressure, improved material availability, declining shipping rates and weaker demand for inputs.

Vendor delivery times shortened for the third straight month as supply chain pressures continued to ease following the severe disruptions experienced over much of the prior three years.

"Over 60 percent of firms expect to expand production over the next 12 months," S&P Global Market Intelligence Director Rob Dobson said.

"But demand will need to pick up in the months ahead to warrant any increase in production, and with the UK seeing stubbornly high domestic inflation coupled with a worsening export trend, risks seem skewed to the downside."

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