Business optimism among UK manufacturers declined sharply in April after production and orders logged a slowdown in growth, the Industrial Trends Survey sponsored by Accenture showed Monday.
The business sentiment index fell to -34 percent in three months to April from -9 percent in three months to January. This was the sharpest decline since April 2020, according to the survey conducted by the Confederation of British Industry.
Output increased at a slower pace in the quarter to April, with the balance declining to +19 percent from +27 percent.
The order book balance came in at +22 percent in three month to April, compared with +38 percent in January.
The survey, based on the responses of 250 manufacturing firms, found that average costs in the quarter to April grew at the fastest rate since July 1975. The corresponding balance improved to +87 percent from +74 percent in January.
At the same time, domestic prices grew the most since October 1979. The balance surged to +60 percent.
The war in Ukraine is exacerbating the Covid-related supply crunch, with cost increases and concerns over the availability of raw materials at their highest since the mid-1970s, Anna Leach, CBI deputy chief economist, said.
It is little wonder that sentiment has deteriorated sharply over the past three months and manufacturers are now scaling back their investment plans, she added.