Steady growth for UK manufacturing in March

The Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) showed a reading of 55.1 last month, slightly higher than the 55.0 in February.

A reading above 50 indicates growth.

The figures include:

:: The 20th consecutive month of growth in manufacturing production

:: The 23rd month of growth in new export orders, although the rate of that growth was the lowest in five months

:: Staffing levels rose, but at the slowest pace so far this year

:: Output growth picked up but was offset by slower increases in new orders and employment

:: Input costs and output price inflation both slowed

:: Vendor performance deteriorated sharply, something the survey blamed on ongoing supply-chain disruption and weather-related delays.

:: Almost 55% of manufacturing companies forecast that output will be higher in 12 months’ time

Rob Dobson, director at IHS Markit, said the survey showed UK manufacturing had “entered a softer growth phase so far this year”.

He added: “Although the pace of output expansion ticked higher in March, which is especially encouraging given the heavy snowfall during the month, this was offset by slower increases in new orders and employment.”

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, described the performance as “steady if unremarkable”.

“However, the biggest disappointment was the softening of new orders to a nine-month low followed by a feeble rise in job creation as the most discouraging result this year.

“While trade from the domestic market was still strong, and export markets also grew for the 23rd month in a row, the foundations for the sector’s continuing strength were looking a little more unstable.

“Without a significant rise in new orders, and if supply chains are still disrupted by shortages or the weather, for the next few months it’s anticipated that there will be a continued muted pace of growth.”

Dr Howard Archer, chief economic adviser at EY ITEM Club, said: “While easing back further from January peak levels, the March purchasing managers’ survey still pointed to relatively elevated price pressures in the manufacturing sector so will do little to dilute expectations that the Bank of England will hike interest rates in May.”


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