LONDON, May 2 Reuters British factory output and new orders contracted at the start of the second quarter of 2023, but manufacturers were more optimistic and input costs rose at the weakest rate since May 2020, an industry survey showed on Tuesday.

The final SP GlobalCIPS UK manufacturing Purchasing Managers39; Index PMI fell to a threemonth low of 47.8 in April from 47.9 in March, still below the 50 threshold for growth though higher than the provisional, flash reading of 46.6.

Output and new orders contracted, as manufacturers felt the impacts of client uncertainty, destocking and tightening cost controls, Rob Dobson, director at SP Global Market Intelligence.

Britain39;s economy has been the slowest to recover among the Group of Seven rich nations from the hit caused by the COVID19 pandemic, but it has so far defied forecasts that it would slip back into a recession.

While manufacturing initially surged after the pandemic lockdowns, partly due to a buildup in backlogs of work, activity has since cooled.

Official figures for February showed that manufacturing output was 0.1 lower than three years earlier, just before the start of the COVID19 pandemic.

SP Global said its gauge of future production hit the highest since February last year, with 61 of factories expecting output to rise in the coming year.

Demand will need to pick up in the months ahead to warrant any increase in production, and with the UK seeing stubbornly high domestic inflation coupled with a…