Production volumes picked up at a solid pace in April, but the rate of expansion was the slowest so far in 2015. Survey respondents generally cited softer new business gains, especially from international markets. Measured overall, new work increased at the weakest pace for three months, while export sales dropped for the first time since November 2014. A number of manufacturers noted subdued demand from clients across Europe, in part reflecting the stronger US dollar exchange rate.
Despite a slowdown in output and new business growth, the latest survey indicated that job creation remained solid and was little-changed since March. Anecdotal evidence attributed sustained rises in payroll numbers to strong pipelines of outstanding work, positive sentiment towards the business outlook and the launch of new products.
Manufacturers indicated a slower expansion of input buying during the latest survey period, which in turn contributed to a softer increase in pre-production inventories. Meanwhile, supplier lead times lengthened for the twenty-second month running, with a number of firms noting ongoing transportation delays in the wake of the west coast port strikes earlier in the year.
April data indicated that manufacturing companies experienced another decline in overall input prices, which extended the current run of falling costs to four months (the longest sustained period since 2008/09). As a result, factory gate price inflation across the manufacturing sector eased to its lowest for 11 months.