Survey finds UK’s manufacturing growth has slowed

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2nd March 2016 16:08 - Industrial

According to recent data, the UK manufacturing sector’s growth has slowed down to the point of stagnation.Survey finds UK’s manufacturing growth has slowed

The survey – entitled The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) – revealed that the growth in February was the lowest it has been in 34 months, down from 52.9 in January, to 50.8 in February. The output growth has slowed slowly as a result of flat rates of incoming business growth, in comparison with last month.

Markit have claimed that the slowdown was reflected in the labour market, with job cuts registered for the second consecutive month, however, the scale back was referred to as “quite mild”.

The rate of growth for manufacturing production plummeted to the lowest it has been in seven months, in February, with a notable slowdown in investment and consumer goods sectors being a prominent factor.

Markit revealed that price pressures “remained on the downside during February as both input costs and output charges fell further”.

The amount of new export business placed with manufacturers in the United Kingdom decreased for the second consecutive month.

Markit’s Senior Economist, Rob Dobson, said that the latest figures said that the Bank of England were right to reject calls for an increase in interest rates.

He added: “The breadth of the slowdown is especially worrisome. The domestic market is showing signs of weakening, while export business continued to fall. Price pressures also remained firmly on the downside, with the survey signalling input costs falling at a double-digit annual pace and average factory gate selling prices showing a further decline.

“A lot of this is driven by the ongoing weakness of global commodity prices. However, there are also signs that weaker growth is driving up competition between manufacturers to secure new business and among their suppliers too,”

Markit suggested that in Europe, the rate of expansion in the Eurozone manufacturing sector also continued to slow in February, with growth in new orders, production, new export business and employment all slowing.

Markit also said: “Manufacturing production rose at the slowest pace for a year, as rates of expansion in new business and new export orders eased to the weakest since April 2015 and January 2015 respectively,”

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