Burnout fears as PMI dips again

Markit/CIPS figures showed a marked slowdown in new orders and continued inflationary pressure. PMI has now fallen in two consecutive months after breaking through the 60 mark this January. The latest data made ominous reading for the sector said Rob Dobson, senior economist at Markit. He commented: "The manufacturing growth spurt looks to be fading rapidly...The outlook has deteriorated sharply, with new orders growth having collapsed from a booming pace at the start of the year to only register a weak influx of new business in April." Weaker growth was down to faltering domestic demand according to the survey. Manufacturers reported subdued consumer confidence and lower orders from the construction sector. However, booming export demand helped bring some cheer. Higher orders were linked to increased demand from the US, China, Russia, Europe and Turkey, Markit/CIPS said. The trend was leading to a "tale of two markets" said David Noble, CEO at CIPS. Export-focused businesses were thriving while those dependent on the domestic market struggled, he said. Overall the picture looked more downbeat than at the start of 2011, he concluded. "The outlook for UK manufacturing is definitely bleaker than it was at the start of the year. The sector was racing ahead just a few months ago but there are now clear signs that it is running out of steam." However, financial experts gave a more optimistic appraisal of the latest figures. Mark Lee, head of manufacturing at Barclays Corporate, said: "Despite a fall in the April PMI figures, the manufacturing recovery remains on track with the figures showing growth for the past 21 months."