Growth of goods production accelerated in April, with the rate of increase reaching the fastest since January 2017. Anecdotal evidence suggested the steep rise was due to greater new order volumes and the acquisition of new clients.
Reflective of stronger client demand, new business received by manufacturers rose at an accelerated rate that was the quickest since September 2014. However, new export sales continued to increase at a modest pace that was similar to that seen in March.
As the pace of new order growth continued to exceed that of output, the level of outstanding business increased again in April. At the same time, employment growth softened slightly, with the pace of job creation dipping to an eight-month low, albeit remaining solid.
Greater global demand for raw materials and recently introduced tariffs were reportedly key factors behind greater cost burdens in April. Moreover, the rate of input price inflation accelerated to the sharpest in almost seven years. Meanwhile, average prices charged rose at the quickest pace since June 2011, with the rate of inflation accelerating for the fourth successive month. Survey respondents commonly noted that higher charges were due to increased costs being passed on to clients.
Purchasing activity increased further in April, with growth quickening to the strongest in over three-and-a-half years. That said, firms expressed difficulties in sourcing inputs as supplier delivery times lengthened to the greatest extent since February 2014. Stockpiling activity was impacted by delays, with pre-production inventories rising only fractionally.
Finally, business confidence toward the year-ahead output outlook remained robust amid a sustained rise in new orders. Optimism was the second-highest since June 2015.