UK manufacturing growth hit a 13-month low in March, while business optimism fell to a 14-month low, according to a survey released on Friday.
The S&P Global/CIPS manufacturing purchasing managers’ index fell to 55.2 from 58.0 in February. This was below the flash estimate of 55.5 but above the 50.0 mark that separates contraction from expansion.
Ongoing supply shortages, greater caution among clients, escalating inflationary pressures and geopolitical tensions all hampered the upturn, the survey found.
All five of the PMI sub-components were down, with weaker growth of output and new orders, slower upturns in both stocks of purchases and employment and a lessening in the extent to which average supplier lead times were lengthening.
Rob Dobson, director at S&P Global, said: “March saw a marked growth slowdown in the UK manufacturing sector, with rates of expansion for production and new orders both easing and new export business suffering back-to-back declines. The slowdown in consumer goods output was especially marked.
“Manufacturers are being hit by several headwinds simultaneously, as supply shortages, greater caution among clients, escalating inflationary pressures, ongoing Brexit factors and rising geopolitical tensions all hamper the upturn. It is therefore little surprise that business optimism has slumped to a 14-month low.
“The inflationary picture also provides no signs of inflation pressures abating, with the already elevated rates of increase in input costs and selling prices both re-accelerating. Job creation is holding up better though, with a further solid increase seen in March, as companies continue to respond to continued growth and address ongoing labour shortages. However, such strong hiring looks unsustainable in the face of the mounting headwinds.”
