Irwin Mitchell Remains Optimistic For The Rest Of 2018

The latest IHS Markit UK Manufacturing Purchasing Managers’ Index (PMI) has today fallen to a 17-month low.

Growth in the sector has slowed, although UK manufacturers continue to grow with the all-important 50 index figure, at 53.9 for April, lower than the 54.9 for March 2018.

Slower output, new order and jobs growth were reported for April.

Staff levels have increased in investment and intermediate goods. Consumer goods have been hit hard, however, making the first job cuts in over a year.

The slower pace of growth and economic disappointment, as seen in the latest poor gross domestic product (GDP) results, combined with uncertainty about Brexit, barriers to trade and Sterling strength, have led to the lowest optimism in the sector for five months.

Rising stocks and slowing backlogs of work mean the sector is likely to remain subdued with lower output for several months.

Inflationary pressures are lower, although they remain high. However, there are some positives we can take from the latest report.

Dorrien Peters, head of manufacturing at law firm, Irwin Mitchell, commented on the report: 

Expert Opinion

“The sector’s growth has slowed and although this isn’t too surprising bearing in mind what other recent economic barometers have shown, it’s important to remember that overall we are still seeing growth.

“There are concerns for the rest of the year, but I remain optimistic that manufacturers can deal with the current uncertainty and that the overall picture for 2018 will be positive.”
Dorrien Peters - Partner

David Johnson, founding director of currency specialist, Halo Financial. commented: “Exchange rate volatility, particularly the Pound falling again, combined with Brexit and general economic uncertainty have led to a slowing in growth of new overseas business.

“But if you look behind the disappointing headline index figure, the manufacturing sector in the UK has reported growth every month for nearly two years. This is despite all the economic and political pressures.”