May 1, 2009
British manufacturing contraction slows
The shrinking of Britain's manufacturing sector slowed down in April more than economists expected, helped by signs the decline in new orders was braking.
The CIPS/Markit manufacturing purchasing managers index rose to 42.9, up from 39.5 in March, blowing past economists' forecast of 40, The Financial Times reported Friday.
While a level below 50 indicates contraction, economists said the index recovered significantly from the dismal levels of weakness shown between November and February. Data also indicate the manufacturing sector's decline was at its slowest pace since August.
The intense gloom hanging over the industrial sector might finally be starting to lift, economists at Capital Economics told the Times.
The slower pace of contraction in April was driven largely by a slower decline in new orders for manufactured goods and by stabilization in export orders, economists said. The pound fell by about a quarter compared to other global currencies since the financial crisis began, helping boost the competitiveness of British goods abroad.
Further signs export demand is stabilizing on the back of the weak pound will also be welcomed by manufacturers, Rob Dobson, senior economist at Markit Economics, said.