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April 1, 2009    

Decline in UK manufacturing slows

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by Kay Murchie

The UK manufacturing sector is showing some signs of improvement after the CIPS/Markit manufacturing Purchasing Managers’ Index rose to 39.1 last month, up from 34.9 in February.

Anything below the 50 mark represents a contraction in activity, but the pace of decline last month slowed at a faster rate than economists had predicted by economists.

The reading is the highest since the collapse of US investment bank, Lehman Brothers, last September, which, in turn, resulted in the deterioration of the global downturn.

Many believe the latest reading could be the turning point in the UK recession with the survey also showing improvements in the output, new orders and employment indices.

The new orders index grew from 33.5 in February to 39.0 last month - the highest reading in over 18 months. Meanwhile, the employment index has risen for the first time in 12 months.

However, Benjamin Williamson at the Centre for Economics and Business Research, has issued caution, saying: “Whilst today’s data shows a big move in the right direction, it is still some way below the neutral mark of 50, meaning that in all likelihood the sector will continue to contract.”

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