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Fourteen out of 17 sub-sectors reported lower volumes in April. Manufacturers expect output to marginally fall in the three months to July.
Domestic orders fell across the quarter, as did the volume of new export orders, albeit marginally.
Looking ahead, manufacturers in the country expect the total volume of new orders to decline in the three months to July as both domestic and export orders are anticipated to fall, an ONS release said.
Half of the respondents cited political or economic conditions abroad as a factor likely to limit their export orders in the quarter to July, the highest proportion since April 2021.
Manufacturers reported increased cost pressures. Growth in average costs accelerated in the quarter to April, compared with January, while expectations for costs growth in the three months ahead remain firm.
Domestic prices are expected to rise at an accelerated pace in the quarter to July, whereas export prices are likely to remain unchanged, a CBI release said.
Sentiment across the UK manufacturing sector deteriorated in April and investment intentions for the year ahead are weak.
UK manufacturers expect to reduce spending on buildings, plant & machinery, product & process innovation, and on training and retraining, which saw the weakest balance since 2020.
They cited uncertainty about demand, inadequate net returns and labour shortages as key factors constraining capital expenditure.
The outlook for employment remains poor. Manufacturing headcount fell in the quarter to April, at the fastest pace since October 2020, and manufacturers expect numbers to fall again in the quarter to July.
The survey covered 389 manufacturing firms. Firms expect volumes to fall by 5 per cent in the three months to July.
Business sentiment continued to deteriorate in April. Export optimism for the year ahead also weakened further.
The main constraint on capital expenditure was uncertainty about demand (cited by 58 per cent of manufacturers), followed by inadequate net return (38 per cent) and labour shortages (19 per cent).
Average domestic prices rose in the three months to April and export price inflation was broadly flat. Domestic prices are expected to rise at an accelerated pace in the quarter to July, whereas export prices are anticipated to remain unchanged.
Manufacturers expect stocks of raw materials, work in progress and finished goods to all fall in the three months to July, although all at a slower pace than expected in January.
Fibre2Fashion News Desk (DS)