UK DATA: Upward Revision To April Manufacturing PMI; But Details Still Soft

Decent upward revision to the UK  April manufacturing PMI, with he final read printing at 45.4 (vs 44.0 flash, 44.9 prior). It’s still the seventh consecutive month in contractionary territory, though.

• The broad themes of the report align with the flash release: Trade uncertainty is weighing on demand, particularly in export markets; Increased NIC and wage costs are dragging on employment; and Input price increases are being passed onto output prices.
• This data, alongside the services and composite PMIs next Tuesday, will set the scene for the BOE’s May decision. A 25bp rate cut is widely expected, with focus on updated projections and any tweaks to the statement guidance.

Key notes from the release:

• “Panellists reported that rising economic and trade uncertainties (including prospective US tariffs) had drained confidence from both consumer and business-to-business clients, resulting in an increased reluctance to commit to new contracts”
• “These factors also led to a comparatively large contraction of output and new work received at investment goods producers, suggesting that subdued market confidence was hitting demand for capital goods especially hard”.
• “New export orders fell at the quickest pace in almost five years, with demand from the US, Europe and mainland China all lower”
• “The tough current backdrop, rising cost pressures and increased uncertainty at manufacturers and their clients alike led to lower business optimism, reduced staff headcounts”
• “Manufacturing employment declined for the sixth month running in April. The rate of job losses accelerated and was the second-sharpest in almost five years”…” Many firms noted that lower staff headcounts were necessary to offset the impact of rising national insurance contributions, increased minimum wages”
• “April saw average purchases prices rise at the quickest pace since December 2022”…” Manufacturers passed on some of these cost increases to their clients, leading output price inflation to accelerate to a 26-month high”.