Manufacturing production fell for the second consecutive month in April. That said, the contraction rate is still mild and slightly less pronounced than the previous survey month. Output increased in the investment goods sector, but decreased in producers of consumer goods and intermediates. Companies report that output has shrunk due to a drop in new jobs from both domestic and foreign customers.
Total new orders fell at the fastest pace in three months in April, after rising for the first time in nearly a year in March. According to the S&P Global / CIPS UK Manufacturing PMI report, which mentions increased customer uncertainty, reduced customer inventory and cost control efforts, all both contribute to a reduction in the number of new jobs being placed.
The UK’s seasonally adjusted manufacturing purchasing managers’ index (PMI) fell to a three-month low of 47.8 in April 2023, slightly above the quick estimate but signal that operating conditions have deteriorated. Output, new orders, employment and inventories all fell, while supplier delivery times improved due to weaker demand.
Meanwhile, weaker demand from the US, China and mainland Europe led to a reduction in new business from abroad. New export orders contracted for the fifteenth consecutive month, with momentum easing. However, the data broken down by sector provides a more diverse picture. Producers of consumer goods and intermediate goods saw the number of new export jobs continue to decline, while the investment goods sector saw growth hit a 20-month high.
April saw further job losses at UK manufacturers. Employment fell for the seventh straight month, albeit at the weakest pace in that series. The reduction in the number of employees is concentrated in medium and large companies. In contrast, small-scale manufacturers increased employment for the fourth straight month.
Although current conditions remain difficult, manufacturers maintain a positive outlook for April. Optimism rose to a 14-month high, with more than 61% of companies reporting that they expect output to increase next year. The positive sentiment reflects investment spending, new product launches, forecasts for improved market conditions and organic growth plans.
There is also positive news for manufacturers in terms of price and supply. The growth rate of average input costs and output costs both decreased in April, falling to the lowest levels in 35 and 28 months respectively. Companies link slower cost increases to reduced supply chain pressures, improved raw material availability, lower transportation costs and weaker input demand.
Supplier delivery times shortened for the third month in a row in April, another sign that supply chain pressures have eased following severe disruptions experienced for much of the year. three years earlier. There have been mentions of improved material availability, better inventory levels at suppliers, and signs of suppliers addressing backlogs and bottlenecks. The reduced demand for raw materials also contributed to shorter delivery times, the report added.
April saw input purchases at UK manufacturers fall for the tenth consecutive month. Purchasing activity has been slashed due to lower production requirements and efforts to cut excess inventory. Inventories of both input materials and finished products decreased in the most recent survey month.
Fiber2Fashion (DP) News Desk
