PMI dips to lowest point since September 2009

According to the authoritative Manufacturing Purchasing Managers' Index (PMI), smaller-scale manufacturers and those producing consumer goods were hit hardest as the index dropped to 52.1– its lowest level since September 2009 – from April's reading of 54.4 but managed to remain above the neutral 50.0 mark for the 22nd successive month. Economist Rob Dobson, who is the author of the Markit/CIPS Manufacturing PMI, said the data suggested that UK manufacturing had moved from rapid expansion to near-stagnation. He went on: "Domestic market weakness was the main drag on order books and output. However, this was exacerbated by the additional bank holidays in late April, which fell during the early part of the latest survey period, and ongoing supply-chain disruption following the Japanese earthquake." On the plus side, job creation held up comparatively well in May, while inflation of input costs and factory gate prices moderated following recent declines in the price of oil and other commodities. Chartered Institute of Purchasing & Supply CEO David Noble (pictured) added: "The Royal Wedding and extra bank holidays definitely weren't a bonus for UK manufacturers, with output falling and new orders contracting for the first time in two years. "Concerns that the extra days off would hurt small businesses appear to have been vindicated but other factors such as weakening demand from the domestic market as a whole, disruption to manufacturing supply chains following the Japanese earthquake, and reported shortages of raw materials had a noticeable negative impact. "The picture may not be as disheartening for the coming months, as many of these drags are temporary. With the level of export orders still rising and the rate of inflation easing somewhat, we expect that May will come to be seen as an anomaly. However, the underlying trend is likely to remain one of slower growth compared to the start of the year.