Manufacturing slowdown shows Brexit fears hurting economy: report
The UK manufacturing sector saw activity contract for the first time in more than three years, in the latest sign that the EU referendum is hurting the UK economy, according to a survey.
The closely watched Markit/CIPS UK Manufacturing purchasing managers’ index showed a reading of 49.2 in April. That’s the first time the index has fallen below the critical 50 mark since March 2013. A reading below 50 signals falling output.
The report warned about an “atmosphere of deep unease” among the factory supply chain, which saw new orders slump for the fourth month in a row and job losses mount.
The reading comes as the sector is being hit by uncertainty caused by the vote on Britain’s membership of the EU, which is compounding already tough conditions caused by a global economic slowdown and the recent oil and commodity price rout.
It comes after the latest Ulster Bank purchasing managers’ index survey for Northern Ireland showed manufacturers reported only marginal growth last month and it was the only sector shedding jobs here.
Official figures last week revealed the UK’s economic growth slowed to 0.4% in the first quarter from 0.6% in the final three months of 2015, driven in part by a poor performance from the manufacturing industry.
David Noble, group chief executive at the Chartered Institute of Procurement and Supply (CIPS), said: “Recent fears over a stall in the UK’s manufacturing sector have now become a reality and driven the steepest decline in the manufacturing PMI for three years.