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The UK manufacturing sector activity cooled-off sharply from thirteen-month highs in the month of April, the latest survey report from IHS Markit showed this Wednesday.  

The seasonally adjusted IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) dropped sharply to two-month lows of 53.1 in April versus 53.0 expected and 55.1 last.

Key Points:                

New export business declines.

Stock-building continues at solid, yet slower, pace.

Rob Dobson, Director at IHS Markit, commented on the survey:

“The upturn in the UK manufacturing sector eased at the start of the second quarter. Growth of output and new orders slowed, leading to job cuts for the third time in the past four months. The trend in new export business was especially weak, as high stock holdings at clients and slower global economic growth led to reduced demand from key markets such as the European Union, the USA and China. There were also reports of overseas clients acting now to re-route their supply chains away from the UK in advance of Brexit.” ´

“A central theme at UK manufacturers during recent months has been stockpiling activity in advance of Brexit, and this process continued into April. Rates of increase in both inventories of inputs and finished products remained historically rapid, despite cooling from the record highs seen in March. Companies noted that the delay to the scheduled Brexit date meant they had to ensure levels of key inputs remained sufficiently large to cover as broad a range of outcomes as possible in coming months. “