GROWTH in UK manufacturing activity eased in March for a fourth consecutive month, to its slowest pace since last summer, a survey has revealed.
The survey, published yesterday by the Chartered Institute of Purchasing and Supply, was significantly weaker than economists had expected.
CIPS's purchasing managers' index (PMI) for manufacturing, a composite measure of activity including output, new orders, employment, suppliers' delivery times and stocks of goods purchased, fell from a downwardly-revised 56.2 in February to 55.3 in March on a seasonally-adjusted basis.
The City had predicted a March reading of 56.7. The actual figure of 55.3, while remaining well above the level of 50 deemed by CIPS to separate expansion from contraction, signalled the slowest pace of increase in this composite measure of manufacturing activity since July last year.
CIPS's manufacturing output index fell from 58 in February to 57.7 in March. The pace of increase of new export orders eased significantly in March, the survey showed. Growth in overall new orders also slowed sharply, but was nevertheless robust by historical standards.
Paul Hollingsworth, assistant economist at consultancy Capital Economics, said: "Although March's CIPS manufacturing report indicated that the sector's recovery may have lost some steam over the first quarter, this seems unlikely to herald the beginning of a renewed slowdown."
However, he added: "Admittedly, the fall in the headline PMI took it to the lowest level since July last year. Meanwhile, the sharp fall in the export orders balance... suggests that UK exporters may finally be feeling the effects of the strong pound."
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "The March purchasing managers' survey is slightly disappointing in that it shows overall manufacturing expansion moderating to an eight-month low but it nevertheless still points to decent growth in the sector."
He added: "Slightly worryingly, the survey indicated that March's slowdown in manufacturing output and new orders was mainly centred on the investment goods sector, which is not good news for hopes that business investment can see sustained robust improvement over the coming months and help the economy become more balanced."
The survey continued to point to a solid rate of expansion of the UK manufacturing workforce.
Rob Dobson, senior economist at survey compiler Markit, said: "The latest manufacturing PMI is likely to disappoint the markets, coming in more than a full index point below expectations, but it's important to remember this is in the context of the super-strong, near-record growth rates seen in the second half of last year.
"Growth is merely hot rather than scorching, and the take-home messages from the March survey are that the recovery remains solid and continues to drive strong job creation."
Chancellor George Osborne had, in his March 2011 Budget, spelled out his vision of "a Britain carried aloft by the march of the makers".
But manufacturing output in January, the latest month for which figures from the Office for National Statistics are available, was lower than in March 2011.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article