The IHS Markit/CIPS UK Manufacturing PMI fell to 53.1 in April 2019 from March's 13-month high of 55.1 but slightly above market expectations of 53. With the deadline for Brexit now pushed back to October 31st, the pace of stockpiling eased off significantly and new export business contracted at the second steepest pace in four-and-a-half years. Output growth slowed from March's ten-month high and new orders growth weakened. Also, the job creation rate fell amid natural wastage, improved efficiency and workforce restructuring.
Commenting on today’s PMI figures, Francesco Arcangeli, economist at Make UK said: “After swerving to avoid falling over the no-deal cliff-edge twice in the last two months, businesses got back to normal in April, reducing their stockpiling activities and consequently pushing production activities back to more usual levels after output had been artificially boosted by emergency stock build-ups in January and February.
“However, this slower output is also a reflection of increasingly weak demand and growing job losses. In particular demand from overseas has been hit particularly hard with several overseas customers reducing their British supply chains to divest themselves of their reliance on the UK market.
“This is a clear wake-up call for the government to make sure that time is not wasted in solving the Brexit impasse so we can avoid another cliff-edge climb down in October.”
Helena Sans, head of manufacturing at Barclays, added: “The underlying state of health of UK manufacturing continues to be obscured by stockpiling, albeit down from the last survey’s record high, as Brexit uncertainty still thwarts investment intentions.Continuing increases in inventories of both inputs and finished goods have exacerbated the slowdown in growth of new orders and given the loss of momentum in exporting activity, with growing signs that overseas markets are looking to alternative suppliers, the sector needs some degree of clarity on the future relationship with the EU sooner rather than later.”
