U.K. manufacturing sector records stable growth in March, PMI index rises slightly to 55.1

Manufacturing sector of the U.K. maintained a stable rate of growth during March. The seasonally adjusted IHS Markit/CIPS Purchasing PMI rose a bit to 55.1 in March from February 55. The average reading over the opening quarter as a whole was the weakest in a year, implying that the underlying rate of growth has been generally slower since the start of 2018.

Manufacturing production rose for the 20th straight month in March. The pace of growth accelerated to the sharpest in the year-so-far, in spite of a moderation in growth of incoming new orders. Similar to the trend in the headline PMI, average rates of growth in production and new business over quarter one were lower than in recent quarters, implying that the underlying strength of the upturn has downshifted since the turn of the year.

Firms continued to report strong inflows of new work from domestic and overseas markets in March. New export orders rose for the 23rd straight month, with the pace of rise a bit above the average for the sequence. The latest growth in new export business was attributed to successful marketing campaigns, a favorable exchange rate and improved sales volumes to existing clients.

Staffing levels rose for the 20th month running in March, although at the slowest rate during the year-so-far. Higher employment, along with a mild slowdown in the pace of expansion in new orders meant that companies made further inroads into backlogs of work. Outstanding business fell marginally during the latest survey month.

Price pressures eased in March, with rates of rise in input costs and output charges both decelerating. Although purchase prices rose to the weakest degree in the year-to-date, the rate of inflation was still comparatively strong. Higher costs reflected raw material shortages, supply chain disruption and rising commodity prices.

Average vendor performance deteriorated sharply, mainly linking it to ongoing supply-chain disruption, including shortages of certain inputs. Manufacturers kept a positive outlook in March. Nearly 55 percent of firms project that output would be higher in 12 months’ time.

At 14:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at -23.3569, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 87.677. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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