The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) dropped to 50.5 in April from a downwardly revised 51.9 in March, keeping the sector just above the 50 level which separates growth from contraction.
Stephen Cooper, UK head of diversified industrials at KPMG, comments on the Markit/CIPS manufacturing PMI:
“Europe remains a major concern and is becoming the elephant in the room. But despite export demand slowing down and recessionary fears, the UK manufacturing industry is still on relatively stable ground.
“This fluctuation in demand is expected and will continue throughout the year as the eurozone crisis remains unresolved. By all means, this doesn’t mean that manufacturing is losing its lustre as the economic climate remains uncertain.
“Manufacturers are starting to feel the pinch of the eurozone crisis and are adjusting their business models to focus on their core business. A decrease in export demand has slowed growth but what manufacturers need to focus on is maintaining a sound balance sheet and improving cash & working capital.
“The same headaches such as volatility in input prices, competitive pressure on selling prices, uncertain demand and supply chain risks will remain as key challenges for manufacturers. There are however encouraging signs that manufacturers are already seeing beyond this and investing in the right places.
“Overall, the months ahead will see peaks and troughs in demand and output but manufacturers are investing in long-term growth through innovation, partnerships and markets outside of the eurozone for top and bottom-line growth.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.