The ICI Manufacturing Purchasing Managers’ Index (PMI) fell to 49.2 in April from March’s 49.4. April’s result marked the worst reading since May 2020. As a result, the index fell further below the 50.0 no-change threshold, signaling a sharper deterioration in business conditions compared to the previous month.
The deterioration was driven by muted demand dynamics amid building inflationary pressures. New orders eased for the seventh month running, and new export orders cooled for the first time since January. Consequently, output slowed for the fifth consecutive month. The war in Ukraine was among the reasons for the scaling back of production. Turning to prices, the war in Ukraine and currency weakness continued to push up prices, although the pace of inflation eased for the fourth consecutive month. That said, output prices rose markedly.
Andrew Harker, economics director at S&P Global, commented:
“Both cost pressures and supplier delays were at the least pronounced since September last year, providing some hope that conditions will become more conducive to growth as this quarter progresses.”
FocusEconomics Consensus Forecast participants see fixed investment contracting 2.9% in 2022, which is down 0.4 percentage points from last month’s forecast, and growing 2.7% in 2023.