UK PMI misses forecasts, slips into contraction for the first time since February 2013

UK seasonally adjusted Markit/CIPS PMI fell below the critical no-change mark of 50.0 for the first time since March 2013. UK Manufacturing PMI came in at 49.2 in April, from a downwardly revised reading of 50.7 in March. Lackluster trends in production and new orders combined with declines in both employment and stocks of purchases weighed on the headline.

Both consumer and investment goods sectors registered declines in production and new work received. New export orders fell for the fourth straight month in April, albeit only marginally, as global economic growth continued to slow. Job cuts were reported for the fourth successive month, with the rate of decline the fastest since February 2013.

On the prices front, deflationary pressures continued to ease in April. Average input costs fell at the slowest pace since June 2015, while the rate of decline in selling prices was only marginal and the weakest in the current eight-month sequence of reduction.

"Data highlights 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 and putting greater pressure on the service sector to sustain GDP growth." said Rob Dobson, Senior Economist at Markit.