UK manufacturing growth stalled in April

UK manufacturing growth stalled in April


The increase in manufacturing operations in March came to a halt into April, as rates of expansion in output and new orders slowed, and new export business declined at the second-fastest pace in four-and-a-half years.  


Brexit stock-building continued, although at a lesser extent than in the prior survey month.  

The headline seasonally adjusted IHS Markit/CIPS Purchasing Mangers’ Index (PMI) fell from March’s 13-month high of 55.1 to 53.1. This is alongside weaker growth in production, new orders and stocks of purchases.  

Increased stockpiling in preparation for Brexit has been the key theme in UK manufacturing over the last few months, ending with survey-record increases in both inventories of inputs and finished products in March. 

This process continued into April, with further expansions to holdings signalled, although the delay to the UK’s leaving date meant that rates of increase in both stock measures eased.  

Output growth reduced from March’s ten-month high in April, with rates of expansion easing sharply in the intermediate and investment goods industry, in contrast to a small acceleration at consumer goods producers.  

The upturn in new work received also fell, as domestic market conditions remained subdued and new export businesses contracted.  

April saw overseas demand decrease at the second-fastest pace in the past four-and-a-half-years, with Brexit uncertainly being the main factor, according to firms.  

There was a mention of some clients re-routing supply chains away from the UK and of their inventory holdings already being relatively high following recent stock-building activity.  

Slower world market conditions also contributed, with reports of lower demand from the EU, the USA and China.  

Business optimism improved to a seven-month high in April, with over 50% of businesses predicting that output would increase over the coming year.  

This outlook was linked to expansion plans, new product launches, use of new technology, marketing strategies and an improved operation environment.  

However, some firms noted ongoing concerns regarding Brexit, and the possible impact of future destocking at clients on demand and production moving forward. 

The average purchasing costs increased in April, due to higher commodity, energy, oil and raw material prices. Output charges also rose, although the rates of inflation in both prices measures were weaker than in March.  


Manufacturing operations in the US saw a moderate improvement throughout April, with expansions in output and new orders picking up from March’s declines, and new business growth at the fastest rate for three months.  

The PMI posted at 52.5, slightly up from March’s 52.4. This meant that the latest improvement in the health of the U.S manufacturing industry was the second-slowest since June 2017. 

Although faster than in March, the latest upturn in production across the goods producing sector was among the softest seen in the last two years, and below the series trend.  

Panellists linked the rise in output to a further increase in new orders and efforts to clear backlogs. 

New business growth was also seen in April, and the expansion was the fastest for three months, although slower than the 2018 average. 

Evidence found that the rise in new orders was due to greater marketing activity and new product launches, although foreign client demand remained subdued. The marginal upturn in export sales was linked to the acquisition of new clients, but many noted that global trade tensions and slowing foreign demand reduced growth.  

Manufacturing firms registered a rise in backlogs in April, with the rate of accumulation the fastest since November 2018, as new order growth overtook the increase in output.  

Input price inflation eased for the sixth successive month and signalled the slowest rise in cost burdens since July 2017.  

Both pre- and post-production inventories continued to rise in April, as manufacturing companies reportedly increased their stock holdings, as there are forecasts of further new order growth. 


The Eurozone’s manufacturing industry remained firmly in the contraction territory throughout April.  

After accounting for seasonal factors, the PMI registered at 47.9, a slight increase on March’s near six-year low of 47.5. The PMI has been below the 50.0 no-change mark for three months in a row. 

In line with recent trends, the capital and intermediate goods sector remained the main areas of weakness in April. 

Both sectors remained firmly inside contraction territory, despite recording slight improvements in their PMI numbers.  

The consumer goods sub-category continued to expand, with growth rising to a modest level.  

Germany’s manufacturing operating conditions were the lowest out of all countries, registering at 44.4. Although this is a slight improvement on March (44.1). While Austria and Italy also recorded below 50.0 PMI readings, 49.2 and 49.1 respectively, the rates of contraction signalled were marginal and much weaker than Germany’s decline.  

In contrast, Greece recorded the strongest improvement in operational conditions, with growth reaching its highest level in nearly 19 years (56.6). Manufacturing gains were seen in Ireland (52.5), the Netherlands (52.0), and Spain (51.8).  

The quantity of new orders received by Eurozone manufacturers continued to decrease in April. However, not at the same degree as in March.  

Export orders remained a source of demand weakness, with data showing these orders falling at a similarly marked rate to that of total new order books. 

A third continuous monthly fall in production was signalled by April’s data, with the rate of contraction modest. However, manufacturers were able to make noticeable inroads into their backlogs of work outstanding. April’s survey found that backlogs were reduced to the greatest degree since November 2012. 

Purchasing activity also fell in April for a fifth successive month, with the rate of contraction matching March’s near six-year record.  

Input price inflation improved during April, though it remained much weaker than rates seen during 2017 and 2018. With demand declining and competitive ongoing pressures, manufacturers’ pricing power was limited. Although output charges increased over this month, it was modest and at the slowest rate for nearly two-and-a-half years.  

Manufacturers remained confident of a return to output growth in the forthcoming 12 months, but the level of optimism remained historically weak and was only slightly higher than March. 


China’s PMI for April was 50.1, a slight increase from March’s 50.0.  

The main raw material inventory index was 47.2, down from 48.4 last month, and still lower than the threshold.  

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