PMI data finds UK manufacturers in the doldrums

These are two findings from the seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI), which was down to 47.8 in April from 47.9 in March.

All five PMI components signalled a deterioration in operating conditions: output, new orders, employment and stocks of purchases all contracted, although vendor lead times improved.

Manufacturing production fell for the second consecutive month in April, but the rate of contraction remained mild and slightly less marked than in March. Output rose in the investment goods sector but fell at consumer and intermediate goods producers. Companies reported that output was scaled back due to reduced intakes of new work from domestic and overseas clients.

April saw further job losses for the seventh month in a row with headcount reduction focussed on medium- and large-sized companies. Small-scale producers raised employment for the fourth successive month.

Although current conditions remained subdued, manufacturers maintained a positive outlook in April with over 61 per cent of companies reporting that they expect output to rise during the coming year. Positive sentiment is reflected in investment spending, new product launches, forecasts of improved market conditions and organic growth plans.