Friday, April 01, 2011
Manufacturing growth slows
Posted by David Smith at 11:00 AM
Category: Thoughts and responses

The purchasing managers' index for manufacturing fell in March, suggesting that while the sector is still expanding fast, it is being hampered by weak consumer demand and, possibly, slower growth in export markets. It is still the hot sector of the economy, but slightly less strong than it was. This is Markit's take:

"The seasonally adjusted Markit/CIPS UK Manufacturing PMI™ fell to a five-month low of 57.1 in March, down further from January’s record high of 61.2, but well above its long run average of 51.3. The PMI has signalled expansion in each of the past twenty months.

"Work on new and existing contracts led to a solid increase in UK manufacturing output in March. Over Q1 2011 as a whole, output growth was the fastest since Q3 1994. However, the latest survey period saw the rate of expansion slip to a five-month low, mainly reflecting a sharp slowdown in new order growth.

"Incoming new orders rose at the weakest pace since last October. Companies continued to report higher order intakes from domestic and overseas clients, but noted that inflows from both sources were less marked than in recent months. The extent of the easing was centred on the domestic market, particularly in the consumer goods sector."