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U.K. manufacturing growth slowed in April as firms dialed back Brexit-related stockpiling and new export business fell.
IHS Markit's Purchasing Managers Index for the sector dropped from a 13-month high as production growth also slowed and job losses in the industry mounted. While companies continued to build up stockpiles to guard against Brexit risk, the delay to U.K.'s departure meant they did so to lesser extent than in previous months, according to the survey.
Key Insights
- Markit's index fell to a two-month low of 53.1 last month, the firm said in a report Wednesday, a reading in line with the median estimate of economists in a Bloomberg survey
- Overseas demand dropped, with companies saying Brexit uncertainty was the main factor underlying the decrease. Slower global market conditions also played a role, with lower demand from the European Union, the U.S. and China
- Business optimism rose to a seven-month high, although some firms noted continued concerns about leaving the EU and the possible impact of running down stockpiles
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- A CBI survey last week showed British manufacturers stockpiled at their fastest ever pace in anticipation of the U.K. leaving on its scheduled March 29 exit date
- Markit's report is one of the last major data points before the Bank of England announces its latest policy decision and forecasts on Thursday
- The firm is due to publish similar indexes for the U.K.'s construction and dominant services sector later this week.
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