Purchasing Managers Indices (PMIs) for April, both home and abroad, show a stalling of international orders for manufacturers.
According to JP Morgan’s global Manufacturing PMI, worldwide manufacturing productivity growth has receded for the first time since June 2020, scoring only 52.2 – a 20-month low and only just above the 50 mark which indicates growth.
Declining productivity in mainland China, following fresh Covid-19 lockdowns in the country, was named by the US multinational as a major factor in declining output growth.
JP Morgan’s global output index scored below 50, coming in at 48.5, while the index for new international orders registered its most marginal increase since June 2020.
Over the last two months, new export orders have had their sharpest loss since the early months of the pandemic.
British PMI data improved slightly, maintaining growth for the 23rd consecutive month.
Reuters reports PMI data from S&P Global and the Chartered Institute of Procurement & Supply (CIPS) showing that British factory activity rose to 55.8 in April from March’s 13-month low of 55.2.
However, manufacturers remain wary about the future due to rising costs and supply chain pressures. Just over half (55%) of manufacturers expected output to rise over the coming year, the weakest outlook since December 2020.
More than 60% of manufacturers raised prices in April after the cost of inputs, such as energy and raw materials, jumped by the second-biggest amount on record.
According to the Manufacturer, subdued conditions in foreign markets, the war in Ukraine and wider transportation issues all impacted overseas demand, leading to a drop in export orders.
Closer to home in the EU, longer delivery times, customs checks and higher post-Brexit shipping costs are stymying demand.
Companies also reported buying inputs in advance to counteract expected future price increases, build-up safety stocks and guard against further supply chain disruption.
Rob Dobson, director at S&P Global, said: “Specific to the UK, Brexit represents an additional headwind, notably via lost EU customers, increased paperwork, customs checks and border delays. Business optimism has fallen to a 16-month low as companies become more cautious about the future outlook.”