The UK manufacturing industry has seen its growth levels unexpectedly drop to an eight month low in March, with prices paid by factories falling.
The Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) was at 55.3 for March, a level it hasn’t been at since July of last year and also below all predictions from a Reuters poll of economists.
Feburary’s growth was also brought down, being reduced from 56.9 to 56.2 instead. While the sector is still showing growth by being above 50, this is now the 4th consecutive month that the rate has fallen. Still this news will likely be a small warning to those in the manufacturing industry that close attention still needs to be paid to ensure growth is sustained in the long-run.
There have been positive signs though. With manufacturing growing for a decent period of time recruitment rates are up. Hiring was at a 33 month high in February with just a slight drop in March.
Rob Dobson, senior economist at Markit said: “Growth is merely hot rather than scorching, and the take-home messages from the March survey are that recovery remains solid and continues to drive strong job creation.”
Still, investors are likely disappointed by the drop in both growth and hiring rates, but they definitely won’t be alarmed. The sector is healthy for the time being and, without some significant negative event, will stay like that for some time.
Image by Mstyslav Chernov.