UK manufacturing figures offer some hope

Wednesday 01 May 2013 13.30
UK manufacturing PMI moves up to 49.8 in April from 47.9 in March
UK manufacturing PMI moves up to 49.8 in April from 47.9 in March

A "glimmer of hope" emerged for Britain's struggling manufacturers today after new figures suggested the downturn in the sector could be coming to an end.

Output and new orders picked up for the first time since January, according to the latest Markit/CIPS purchasing managers' index.

The headline reading of 49.8 for April was just below the 50 level which separates growth from contraction, up from a low of 47.9 in February and 48.3 in March.

It is the latest encouraging sign for the UK economy after gross domestic product figures last week showed the country avoided a triple-dip recession with growth of 0.3% in the first quarter.

While the headline reading of GDP masked the fact that production and manufacturing was still significantly weaker than its pre-recession peak in 2008, today's figures provide signs that the sector is getting back on its feet.

Levels of production and new orders rose slightly after contracting in the prior two months, with output growing in some areas and the rate of contraction easing back in others.

Export orders rose, boosted by increased sales to North America, the Middle East, Latin America and Australia, though demand from the euro area remained "lacklustre".

Manufacturing job losses were recorded for the third month in a row in April but the overall rate was less than in the previous two, according to the data.

Rob Dobson, senior economist at survey compilers Markit, welcomed signs that the sector was "stablising" after a poor start to the year.

''Manufacturers report that the domestic market is just about holding its head above water, but was still a key cause of disappointingly weak demand, while a solid improvement in export orders was the real surprise," he said.

"A march of the makers may be on its way following the first rise in export sales for a year with the Americas, Middle East and Australia making up for lacklustre demand in Europe, giving the manufacturing sector something to savour,'' David Noble, chief executive at the Chartered Institute of Purchasing and Supply, said.

But he said that the sector was not in "rude health" and that "tough times will undoubtedly continue". "Businesses remain cost cautious, but the latest figures are a chink of light in the tunnel," he added.