talking trade WILL JONES Chief Operating Officer of the British Home Enhancement Trade Association (BHETA)


Spotlight on themanufacturing sector Predictions are thatmanufacturing will take a hit in the second quarter


J


ust as in April, theMay figures confirm many positives. Retail sales overall are up, as is construction, and employment


remains at its highest since 1974.


Lurking alongside these statistics is another - the PurchasingManagers' Index (PMI) - and the situation which that reveals is concerning, to say the least.


[PMI is an indicator of of themanufacturing se


ctor. It is based on five the economic health


indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.]


The PurchasingManagers’ Index fell to 53.1 in April fromMarch's 13-month high of 55.1. With Brexit now pushed stockpiling eased off sig


nificantly and new back, the pace of


export business contracted at the second


For some while, the quarterly CBI SME Trends steepest pace in 4.5 years.


Survey has reflected that the stockpiling of raw materials and finished goods were at record highs. In terms of the consequences, the


predictions were bleak. In a survey of 252 SME manufacturers, growth in output volumes slowed to its weakest in 18months, with production expected to be flat over the coming quarter. Domestic orders were also flat over the quarter and export orders grew only slightly. Both were expected to fall.


The issue is that, ahead of Brexit,


manufacturers raised stocks of rawmaterials and finished goods at the fastest rates in the CBI survey’s history. Stocks of rawmaterials (+33%) and finished goods (+18%) both grew at their fastest pace since October 1988. Stocks of work in progress were also raised significantly – and all because of the Westminster deadlock.


Such actions are no smallmatter in terms of the strain they put on resources. An 22% of firms said they weremore o regarding their own business situat 33% said they were less optimistic,


ptimistic d while


giving a ion,


rounded balance of -12%. Optimismabout export prospects for the year ahead fell sharply


biggest fall in orders since late 2016, gearing Now, British factories have suffered the again (-25%).


original Brexit deadline and boding badly for th down fromtheir rush to stockpile before the


e


economy in the second quarter. The CBI says itsmonthly order book balance fell to -10 from- 5 in April - below all forecasts in a Reuters poll


October 2016. Overall, the survey suggested th of economists - and its lowest level since


The predictions are that themanufacturing goods since 2009.


sector in particular, and the economy overall, will take a hit in second quarter - at least while some of the stockpiling that occurred in the first quarter is resolved. It’s a serious concern.


• Fo


themember servi or vi


Formore info visit www.


formati w.bheta


tion about BHETA, contact vices teamon 0121 237 1130 ta.co.uk.


HETA k. e


boost tomanufacturing fromthe push to stockpile was fading fast, and factories are now lumbered with the greatest stocks of finished


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June/July 2019


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