The rate of expansion in output improved from March's five-month low, leading to a further solid increase in staffing levels, the PMI found and rose to 55.8 in April, up from 55.2 in March and the earlier flash estimate of 55.3.
The PMI – which is calculated as a weighted average of five subindices – has signalled expansion for 23 successive months. Manufacturing production increased across the consumer, intermediate and investment goods industries.
Solid rates of expansion were registered in the latter two categories, while the expansion at consumer goods producers was only marginal. Companies linked higher production to increased intakes of new business, reduced delivery delays (compared to earlier in the year) and efforts to clear backlogs of work.
The outlook also remained positive, with almost 55% of companies expecting output to rise over the coming year. However, the overall degree of confidence slumped to a 16-month low.
Strong growth headwinds continued to buffet manufacturers during April. New order growth slipped to its weakest in the current 15-month upturn, stymied by lower intakes of new export business and the impact on demand from rising selling prices. Weaker foreign demand reflected subdued conditions in overseas markets, the war in Ukraine and transportation issues.
Lacklustre demand from the EU was linked to longer delivery times, customs checks and higher shipping costs post-Brexit. Inflationary pressures continued to build at manufacturers. Input costs rose at the second-strongest pace in the survey history. Around 85% of companies registered an increase in purchase prices, while there were no reports of a decrease (a survey first)
The rate of inflation at consumer goods producers hit a series-record high. A broad range of inputs were reported to be up in price. This included chemicals, energy, food, freight, fuels, gas, metals, oil, plastics, polymers, timber, and transportation (air, land and sea). Several companies simply noted that "everything" cost more. Supplier price increases, market forces, the war in Ukraine, general inflationary pressure and China lockdowns also contributed to higher purchase prices. April also saw output charges increase to a record extent, as manufacturers acted to pass on rising costs.
Almost 61% of companies reported an increase in selling prices, compared to less than 1% initiating a reduction. Rates of output charge inflation were either at, or near to, series-record highs across the consumer, intermediate and investment goods sectors.
Employment rose for the 16th month running in April, as companies reacted to increased production and rising order backlogs, prepared for expected future growth and addressed staff shortages. Job creation was seen in the consumer, intermediate and investment goods industries and at SMEs and large-sized companies alike. Purchasing activity increased for the 15th month in a row during April.
Companies reported buying inputs in advance of expected price rises, to build-up safety stocks and to guard against further supply chain disruption. Vendor lead times lengthened again in April. This reflected input shortages, port congestion, COVID issues, a lack of transportation capacity (especially for trucks and shipping), customs clearance delays, lockdown in China and the war in Ukraine.
Data was collected from 11-26 April 2022.
