UK manufacturing activity takes Covid-19 hit

UK manufacturing activity moved firmly downwards in March as Covid-19 began to take its toll, Kallanish learns from the latest sectoral survey by IHS Markit and the Chartered Institute of Purchasing and Supply (CIPS). The Purchasing Managers’ Index (PMI) fell by 4 full points, business optimism slumped to a record low and supply chain disruption intensified.

The seasonally adjusted IHS Markit/CIPS PMI fell to a three-month low of 47.8 in March, down from 51.7 in February and the flash estimate of 48.0.

Output fell to the greatest extent since July 2012 following a similarly severe reduction in intakes of new business. The impact was also felt in the labour market and through supply chains. Transport delays and shortages of raw materials led to the steepest increase in vendor lead times in the 28-year survey history, further disrupting production.

Vendor delivery times lengthened to the greatest extent in the 28-year survey history amid reports of input shortages, transport disruption and delays in receiving goods from overseas. International shipping and border delays were also mentioned.

Little more needs to be said. The UK government’s coronavirus-inspired social distancing policy will continue to seriously affect British manufacturing into the foreseeable future. The under-pressure steel sector meanwhile really did not need Covid-19 following the hit it took from Brexit.