UK manufacturing contracts for first time in three years

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Activity in the UK manufacturing sector was down in April, the first time this has happened since March 2013.

The Purchasing Managers' Index for the industry fell to 49.2 last month. A score 50.0 indicates no change on the previous month, above 50.0 shows growth and below 50.0 contraction. The figure was down from 50.7 in March.

A slowing in growth of domestic demand and a reduction in new overseas orders were blamed for the poor monthly results, as new export orders fell for the fourth consecutive month in April. Uncertainty around the EU referendum was also cited as a reason for caution.

Rob Dobson, senior economist, Markit, warned that the figures highlight “a further deepening of the sector’s downturn at the start of the second quarter”.

“On this evidence manufacturing production is now falling at a quarterly pace of around 1%, and will likely act as a drag on the economy again during the second quarter. [This will] put greater pressure on the service sector to sustain GDP growth,” he said.

“Manufacturers are emphasising slower domestic demand growth and declining new export orders as the key weaknesses they are facing, amid rising uncertainty about the global economy, the oil & gas industry, retail sector and the EU referendum. With this backdrop unlikely to change in the coming months, the second quarter is likely to remain a bleak landscape for industry.”