Weak growth in UK manufacturing sector

Manufacturing slowdown is bad news for the economy as  a whole
Manufacturing slowdown is bad news for the economy as a whole

Britain’s manufacturing sector grew at its slowest pace in more than two years last month, impacted by subdued demand from Europe.

The closely-watched CIPS/Markit purchasing managers’ index (PMI) survey showed the sector posted a lower-than-expected reading of 51.4 - where 50 separates growth from contraction.

This is the weakest growth reading since April 2013 and compares with last month’s revised figure of 52.

Economists had expected a reading of 52.3.

The data topped off a poor second quarter for the factory sector, which was the weakest three months for output growth since the first quarter of 2013 due to fewer new orders.

The report said manufacturing growth in the second quarter was kept moving by consumer goods which expanded “at a solid clip”.

The news follows Tuesday’s official figures showing that the economy grew more strongly than previously thought in the first quarter of the year.

GDP increased by 0.4 per cent between January and March, up from a previous estimate of 0.3 per cent, according to the Office for National Statistics.

But experts said the disappointing performance deals a blow to hopes for a marked pick-up in second quarter growth.

Rob Dobson, senior economist at Markit, said: “The UK manufacturing sector had a disappointing second quarter overall.

“Export trade is also likely to remain a drag on the economy, given the uncertainty surrounding the Greek debt crisis.”