Output levels at manufacturing firms continued to expand strongly in March. Although the rate of growth softened to a four-month low, the pace of expansion remained comfortably above the longrun series average. Panellists commonly reported that the latest rise was driven by firmer client demand.
In a reflection of more favourable demand conditions, new orders received by manufacturers expanded sharply, despite growth edging down to a three-month low. Anecdotal evidence commonly attributed the upturn to the acquisition of new clients. Furthermore, new export orders continued to increase, extending the current sequence of expansion to eight months.
On the price front, cost burdens faced by goods producers rose sharply in March. Notably, the rate of inflation accelerated to the fastest since November 2012, with companies stating that price rises often stemmed from recently announced tariffs and higher raw material costs. Average prices charged also continued to increase, with the rate of inflation quickening to the fastest since December 2013.
Firmer demand conditions drove the strongest expansion in buying activity since September 2014, though firms also increased efforts to stockpile inputs. Consequently, firms signalled greater pressure on supply chains, with delivery times lengthening to the greatest extent since February 2014.
In line with sustained growth in new orders, employment rose further in March. The rate of job creation remained strong, albeit dipping to a four-month low.
Finally, expectations towards the year-ahead outlook for production among manufacturing firms were the most positive for just over three years.