MANUFACTURERS are reporting that some overseas customers are re-routing supply chains away from the UK ahead of the country’s departure from the European Union, as export orders fall sharply.
The moves by foreign customers are noted in the latest survey of UK manufacturers from the Chartered Institute of Procurement & Supply, which shows the second-sharpest monthly fall in new export orders for the sector in four-and-a-half years.
The survey shows UK manufacturing sector growth slowed last month as the boost from Brexit-related stockpiling of inputs and finished products diminished with the latest delay in the departure date.
UK manufacturing employment fell for the third time in four months in April, according to the survey. While manufacturers continued to build stocks of both inputs and finished products, the rates of increase eased.
CIPS’s purchasing managers’ index for manufacturing, a composite measure of activity including changes in output, new orders, employment, suppliers’ delivery times and stocks of goods purchased, fell from 55.1 in March to 53.1 last month on a seasonally adjusted basis. While remaining above the level of 50 deemed to separate expansion from contraction, this signalled a significant slowdown in growth.
The survey shows that growth of overall new orders in the UK manufacturing sector slowed, with domestic conditions remaining subdued.
CIPS said: “The main theme in UK manufacturing in recent months has been accelerated stockpiling in preparation for Brexit, culminating with the survey-record increases in both inventories of inputs and finished products in March. This process largely continued into April, with further substantial expansions to holdings signalled. However, the delay to the UK’s departure date meant that rates of increase in both stock measures eased.”
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