16 Apr UK Manufacturing slips back into contraction
The UK manufacturing sector fell back into contraction in March, as output declined following a slight increase in February. Market conditions remained subdued overall. New export business decreased for the 14 month in a row. Overall new order books posted only fractional growth. Work backlogs fell further. Employment reduced for the sixth month running – staffing levels fell at medium and large-scale businesses, but grew at small-scale producers.
The downturn in output was driven by declines in both the consumer and intermediate goods sectors. In contrast, investment goods production rose for the second month in a row. Output fell at small-sized manufacturers, whereas growth was seen at medium- and large-scale producers.
However, cost inflation eased to the lowest rate since June 2020. Average supplier lead times improved. Another positive was business optimism strengthening to a 13-month high, with almost 60% of manufacturers forecasting output to rise over the coming year.
The seasonally adjusted S&P Global/CIPS UK Manufacturing PMI® read 47.9 in March, from February’s seven-month high of 49.3. The PMI has stayed in the contraction zone for eight successive months.