Manufacturing across Europe continues steady growth

Europe’s manufacturing industry continued to show postive signs of growth in most regions during April, but China’s factory sector lost momentum.

Output in Britain’s manufacturing industry jumped to a three-year high as new orders charged ahead on strong domestic and overseas demand.

The Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) showed a reading of 57.3 last month, up from a four-month low of 54.2 in March and above economists’ expectations of 54.

A reading above 50 indicates growth.

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Business confidence among British manufacturers was robust in April, with UK markets driving the strongest inflows of new work since January 2014.

The industry was also enjoying an exports boost from the Brexit-hit pound and the gathering strength of the global economy and the eurozone.

In Germany, manufacturing activity held near a six-year high at the start of the second quarter, suggesting factories will continue to support economic growth in Europe’s biggest economy.

PMI for manufacturing, which accounts for about a fifth of the economy, inched down to 58.2 in April from March’s 71-month high of 58.3.

The index has now held above the 50 line for 29 months running, the second-longest run of growth in activity in the 21-year history of the survey.

“Although growth of output, new orders and employment all eased, this was mostly offset by more evidence of supply chain pressures as input delivery times lengthened to the greatest extent in six years,” IHS Markit economist Trevor Balchin said.

Meanwhile, French manufacturing activity rose to a six-year high in April as new orders improved further even though firms raised prices to pass on higher raw material costs.

Its PMI rose to 55.1 in April from 53.3 in March, reaching the highest level since April 2011.

That was unchanged from a preliminary reading and kept the index comfortably above the 50-point line dividing expansions in activity from contractions.

The flow of new orders improved for the seventh month in a row to also reach a six-year high, with some firms reporting improved demand from the construction sector, which is in the early stages of a recovery after a slump.

In Spain, manufacturing sector expanded at a slightly faster pace in April, with stronger activity in factory employment, output and new orders signalling a strong start to the second quarter.

Its PMI stood at 54.5 in April, up from 53.9 in March. That marked the 41st straight month the index was above the 50 line.

“There was a welcome tick-up in growth in the Spanish manufacturing sector during April, after weaker rises in output and new orders had been seen throughout the first quarter of the year,” senior economist at Markit Andrew Harker said.

In Asia, China’s factory sector lost momentum in April, with growth slowing to its weakest pace in seven months as domestic and export demand faltered and commodity prices fell.

The findings echoed those in official manufacturing and service sector data on Sunday, reinforcing views that China’s economic growth remains solid but is starting to moderate after a surprisingly strong start to the year.

PMI fell to 50.3 in April, missing economist forecasts’ of 51.0 and a significant decline from March’s 51.2.

The index remained above the 50.0 mark, but only just, and grew at its slowest pace since September 2016.

-Agencies