UK manufacturing growth slowed to its weakest pace in seven months in April, as export orders fell and the rate of job-creation slowed, a key survey has revealed.
The survey, published by the Chartered Institute of Procurement & Supply (CIPS), is likely to fuel worries about the momentum of the UK's unbalanced economic recovery.
Figures published earlier this week by the Office for National Statistics showed that the UK economy grew by just 0.3 per cent quarter-on-quarter in the opening three months of this year. This was only half the already below-trend rate of expansion of 0.6 per cent in the final quarter of 2014.
The weak manufacturing survey from CIPS weighed on the pound.
At 5pm, sterling was trading around $1.5137, down nearly two cents on its close against the US currency in London on Thursday.
The pound also dropped against the euro.
The single currency was trading around 73.97p at 5pm, up more than one penny on its Thursday close in London.
CIPS's headline purchasing managers' index for the UK manufacturing sector, which measures changes in output, new orders, employment, suppliers' delivery times and stocks of goods purchased, dropped from 54 in March to 51.9 in April on a seasonally-adjusted basis. While remaining above the level of 50 deemed to separate expansion from contraction, the fall signalled a significant weakening of the sector's growth to the slowest pace since last September.
The manufacturing output index meanwhile dropped from 57.4 to 52.9.
New export orders fell for the second time in three months. And the pace of growth of total new orders slowed sharply. The rate of job creation in the sector meanwhile slowed to an even more modest pace.
Rob Dobson, senior economist at survey compiler Markit, said: "Coming on the back of weaker-than-expected GDP (gross domestic product) numbers on Tuesday and only six days before the General Election, [the] UK PMI delivered less than positive news on the health of the manufacturing sector.
"Rates of expansion in production and order books both slowed sharply in April, meaning manufacturing is again unlikely to provide much of a boost to broader economic growth. This keeps the emphasis for maintaining the recovery highly reliant on the service sector."
He added: "Growth remains largely consumer-led, with the strong performance of the consumer goods sector in stark contrast with other sectors. Companies that supply manufactured inputs to other firms reported a return to contraction, suggesting other firms are planning to cut production.
"The investment and export pictures are also subdued. A decline in capital goods new orders is a weak bellwether for business investment spending, while a slowing global economy and strong sterling-euro exchange rate are hurting the competitiveness of exporters."
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