Manufacturing growth in the U.K. slowed to close the third quarter as rising input costs led to higher prices and slumping domestic demand held back the sector, according to The Daily Telegraph. On Friday, the Markit/Chartered Institute of Purchasing and Supply reported that the headline purchasing managers’ index reading for March was 57.1, which is down from 60.9 the month prior and disappointed economists’ who had been expecting only 0.3-point drop. The latest reading marks the lowest level in five months.
Within the report, the sub-index for output prices surged almost two points to 65.2 in March, which is the highest reading in over a decade of data and increases pressure on policymakers at the Bank of England to contain inflation. The report detailed that the slowdown in growth was led by the consumer goods sector that posted virtually no growth, indicating that domestic demand is slumping as the economy’s outlook becomes increasingly uncertain. Howard Archer of IHS Global Insight summarized the report as “decent,” but highlighted concerns over slumping new orders on “softening domestic demand,” and warned that the data confirmed his view that “manufacturers will find life increasingly challenging over the coming months.”
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