April saw the seasonally adjusted Markit/CIPS Purchasing Managers’ Index (PMI) fall below the critical no-change mark of 50.0 for the first time since March 2013. At 49.2, from a downwardly revised reading of 50.7 in March, Markit suggests that the headline index was dragged lower by lacklustre trends in production and new orders and declines in both employment and stocks of purchases.
The weakening performance of the manufacturing economy was mainly felt in the consumer and investment goods sectors, with both registering declines in production and new work received. Although the intermediate goods sector managed to sustain growth of output and new order inflows, rates of expansion were weaker in April than in March.
Companies generally attributed the deterioration in operating conditions to a combination of softer growth of domestic demand and a reduction in new business from overseas. There were also a few reports that uncertainties regarding the oil & gas industry, retail sector and the upcoming EU referendum had led some clients to delay spending.