UK manufacturing activity rose to a 47-month high in April, according to S&P Global's latest survey of the sector.
The purchasing managers' index hit 53.7, well above the 50 threshold for a sixth consecutive month, signalling continued expansion in the sector.
Output, new orders and employment all increased during the month. Production rose for the sixth time in the past seven months.
New orders increased for a fifth straight month. The rate of growth was among the fastest seen in around four years. Demand was supported by both domestic and overseas clients. Export orders rose from the USA, China, Japan and India. Growth in export demand was affected by disruption linked to the Middle East and restricted passage through the Strait of Hormuz.
Supply chain pressures increased further. Supplier delivery times lengthened at the fastest rate in almost four years. Manufacturers reported delays, transport constraints and customs issues.
Input cost inflation accelerated to a near four-year high. Prices rose at one of the fastest rates in the 34-year survey history. Higher costs were reported across materials including metals, energy, chemicals and electronics. Companies also cited higher taxes and labour-related costs. Selling prices increased for the fifth consecutive month and at the fastest pace since November 2022.
Business optimism fell to its lowest level in a year. Firms cited geopolitical uncertainty and policy concerns.
Rob Dobson, director at S&P Global Market Intelligence, said: “April saw the growth rate of the UK manufacturing sector recover after being hit by the impacts of the war in the Middle East during March. The headline PMI rose to a near four-year high, as the trends in output and new orders strengthened. Staffing levels were also increased for the first time in 18 months.
However, Dobson noted that the upturn comes with several catches. Restrictions on transit through the Strait of Hormuz are causing substantial disruptions to input deliveries, with supplier lead times lengthening to the greatest extent in almost four years. The resulting material shortages are exerting steep pressure on purchasing costs. Input prices rose at one of the fastest rates in the 34-year survey history, and at a pace rarely exceeded outside of the pandemic-related inflationary surge of 2021-22.
"It should also be noted that the gain in production is partly the result of clients bringing forward purchases to mitigate expected price uplifts and supply disruptions," Dobson added. "As this process unwinds later in the year, alongside declining business optimism, growth in the sector could cool while inflationary pressures remain on high heat.”