–Adds Detail, Comments By Markit Economist To O845 GMT Version
–Markit Economist Says No Evidence Data Impacted by UK Holidays
–UK Apr CIPS Manufacturing PMI 54.6: Down From 56.7 In March – Markit

LONDON (MNI) – UK manufacturing grew at its slowest pace in seven
months in April although output price inflation was at near record
highs, according to the latest Markit/Chartered Institute of Purchasing
and Supply survey, published by Reuters.

The data, the first of the CIPS series for Q2, will reinforce
fears of a tepid economic recovery accompanied by resilient inflation.
The CIPS/Markit survey showed the headline PMI activity index, at 54.6,
was markedly below the downwardly revised 56.7 reading for March.

Output price inflation was reported to be only marginally below the
series’ high hit in March.

The manufacturing sector has been expanding more rapidly than
services, but this survey suggests that recovery is cooling. Domestic
demand had cooled, leaving manufacturing reliant on export growth,
according to Markit.

“The manufacturing growth spurt looks to be fading rapidly.
Although output growth was still expanding at an above long-term average
clip, and solid job creation continued, the sector cooled further in
April from the near record pace of expansion seen at the turn of the
year,” Rob Dobson, senior economist at Markit said.

Dobson added that “new orders growth having collapsed from a
booming pace at the start of the year to only register a weak influx of
new business in April. Manufacturers reported that the domestic market
has weakened considerably in recent months, with consumer demand in
particular shifting into reverse gear.”

In a conversation with Market News Dobson rejected the idea the
data had been distorted by the April UK public holidays – Easter Monday
on April 25 and the Royal Wedding Bank Holiday on April 29.

“If there was an effect it would have been marginal,” Dobson said.

He said the survey responses started on April 11 and he ran the
data on April 21, before the bank holidays.

In addition Dobson noted new orders, which should be less affected
by the bank holidays than activity measures, eased off.

Dobson said it was more likely the May CIPS data would show any
impact from the holidays.

Markit seasonally adjusted its data using a standard statiscal
package but does not workday adjust – that is, it will not add in the
extra Royal Weddding Bank Holiday.

–London newsroom 0044 207 862 7491; email:drobinson@marketnews.com

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