Manufacturing production contracted for the eighth time in the past nine months in March.
Business optimism strengthened to a 13-month high, with almost 60% of manufacturers forecasting output to rise over the coming year.
The downturn in output was driven by declines in both the consumer and intermediate goods sectors. In contrast, investment goods production rose for the second month in a row. Output fell at small-sized manufacturers, whereas growth was seen at medium- and large-scale producers.
Lower levels of purchasing activity also contributed to the improvement in vendor performance.
Dr. John Glen, Chief Economist at the Chartered Institute of Procurement & Supply, said: “March was a month of two halves where supplier delivery times saw the biggest improvement for three decades but the continued weakness overall in new order levels, dragged manufacturers further back into the abyss of contraction. This is disappointing news for manufacturing companies still experiencing turbulent business times but optimism in the sector rose to the highest for 13 months. Careful planning around business costs and a close watch on the economy’s performance means that companies will be in a stronger position to take advantage of future opportunities now that the UK has narrowly avoided a recession.”