Manufacturing growth slows in April

Export orders have fallen at the steepest pace since May 2009, dragging manufacturing growth down to almost zero, new data shows.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
The pulse rate of the UK manufacturing sector has been bouncing around all over the place. After a flurry of activity at the start of the year, the opening month of Q2 is now approaching flat-line, with a PMI of just 50.5 in April, just half a point above stagnation.

Adding to manufacturing’s woes, Markit/CIPS have also revised down the figure for March to just 51.9. Just as economic optimists were declaring last week’s recession warning from the ONS a minor blip.

In further evidence of a dreaded double dip, exports are also down: in the first three months of 2012, 0.1% fewer goods and services were sold overseas. And that drop is set to double to 0.2% in the upcoming quarter. This is true across the board, adds CIPS. Any slight peaks are down to firms clearing existing backlogs of work.

New orders have dropped for the first time in five months, hitting 49.18, down from 52.41 in March. This is mainly due to a downturn in the consumer goods sector, resulting from weaker demand from mainland Europe, the US and East Asia. Although Burberry doesn’t appear to have any trouble selling its £1,595 Trench coats…

Rising fuel and transport costs, alongside higher prices for chemicals, feedstock, fuel, metals, oil, polymers, and, er... eggs have hit companies hard. But it’s not all bad. Manufacturing firms are still recruiting and diversifying into new product lines to try and adapt to the new retail environment.

Rob Dobson, senior economist at Markit and author of the Markit/CIPS Manufacturing PMI Survey, has adopted a stoic attitude: ‘The UK recovery was always likely to be bumpy and subdued,’ he points out.

But April’s sudden sharp drop in new export orders will still be a real disappointment. It suggests that the turmoil in our major trading neighbour, the eurozone, is really starting to hit home. Still, it’s important to remember that with a PMI above 50, manufacturing is still technically growing, if only just.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

When spying on your staff backfires

As Barclays' recently-scrapped tracking software shows, snooping on your colleagues is never a good idea....

A CEO’s guide to smart decision-making

You spend enough time doing it, but have you ever thought about how you do...

What Tinder can teach you about recruitment

How to make sure top talent swipes right on your business.

An Orwellian nightmare for mice: Pest control in the digital age

Case study: Rentokil’s smart mouse traps use real-time surveillance, transforming the company’s service offer.

Public failure can be the best thing that happens to you

But too often businesses stigmatise it.

Andrew Strauss: Leadership lessons from an international cricket captain

"It's more important to make the decision right than make the right decision."