A very closely monitored survey, the purchasing managers’ index, compiled by S&P Global and the Chartered Institute for Procurement and Supply (CIPS) has found that British manufacturing growth expanded at its weakest pace in more than a year in March.
Whether this is a trend building or a blip is to be determined but recent data shows British exports to the EU have fallen dramatically in 2021.
The slowdown was driven by a fall in output and in new orders. This also showed that orders had dropped to their lowest level since January 2021.
The monthly purchasing managers’ index, fell to a 13-month low of 55.2. This index is a barometer of economic health in many respects. It remains above 50, which separates growth from contraction, but below the 55.5 predicted by economists. It is a sharp drop from the index score of 58 recorded in February just before Russia’s invasion of Ukraine.
The survey shows that manufacturers are losing confidence in the general outlook and prospects for their businesses despite disruption to supply chains having eased and exports having dropped relatively little since the outbreak of the war in Ukraine,.
Business optimism dropped to a 14-month low and the index for new export orders fell slightly to 49.4 from 49.6 – the survey of 650 manufacturers between March 11 and 28 found
Companies in the sector were less confident in hiring new staff last month bringing the employment index down to 56.7 from 57.9.
Many economists and forecasters are predicting that the second half of 2022 will show the economy starting to show signs of heading towards a recession or at the very least of growth slowing behind competitors and manufacturing growth is a key indicator of those forecasts.