Final data published by S&P Global/CIPS showed that business activity in the UK manufacturing sector declined moderately in April, while output and new orders slipped back into contract territory, as uncertain market conditions, client destocking and supply-chain disruption limited opportunities for sustained expansion.
UK manufacturing PMI fell to 49.1 points from 50.3 points in March. A value below 50 points indicates a reduction in activity in the sector. Economists had expected a decrease to 48.7 points.
The report also showed that four of the five PMI sub-components (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. The latest contraction of production volumes was mainly the result of output being scaled back in both the intermediate and investment goods industries. Meanwhile, output and new orders in the consumer goods sector rose again in April, albeit at a slower pace. The total volume of new orders in the manufacturing sector declined in April amid signs of weakening domestic and foreign demand. Average purchasing costs rose for the fourth successive month in April, with the rate of increase accelerating to its highest since February 2023. Selling prices rose in response, taking output charge inflation to an 11-month high. The data also pointed to a decline in employment in the manufacturing sector. Meanwhile, the outlook for the manufacturing sector remained positive in April. More than half of the companies (52%) predict that production will increase next year, and only 8% expect a decrease. Optimism was associated with hopes for a revival in demand, the launch of new products, increased efficiency and improved market conditions.