Drop off in orders slows UK manufacturing recovery

Manufacturing PMI fell to a ten-month low in September, according to the research from Markit and the Chartered Institute of Purchasing & Supply. The figure calculated from data on new orders, output, employment, supplier performance and stocks of purchases fell from 53.7 in August to 53.4 last month. New export orders also declined slightly for the first time in over a year, the data showed. Drop offs in orders and the first fall in orders for investment goods since last November suggested firms were curtailing capital spending , analysts said. However, manufacturers could take comfort from the fact overall growth had slowed rather than stopped completely according to experts. Rob Dobson, senior economist at Markit said: "September saw the weakest expansion of UK manufacturing for a year, but some reassurance can be gained from the fact that growth has merely slowed from an exceptionally strong rate in the first half of 2010." The latest PMI remained in line with the average seen during the years of robust manufacturing growth, Dobson stressed. Barclays Corporate said manufacturing remained in good shape in spite of the slowdown in production reported by the figures. Graeme Allinson, head of manufacturing, transport and logistics at Barclays Corporate, said: "UK manufacturing remains strong in spite of today's figures confirming a slow-down in production during September. Export growth, particularly to developing countries, will continue to remain a key focus area for manufacturers, even though global demand has weakened." Business advisory firm Deloitte LLP also stressed he figures showed ongoing rises in manufacturing activiry. David Raistrick, UK manufacturing leader at Deloitte said: "September's manufacturing purchasing managers index has slipped slightly from last month; however it is important to recognise that manufacturers are still reporting rising activity, so it is not entirely negative news."