UK manufacturing PMI hits 25-month lows at 52.8 in August
|The manufacturing sector activity in the UK economy slowed down its pace of growth sharply in the month of August, and missed expectations by a big margin, the latest data from Markit revealed on Monday.
The manufacturing Purchasing Managers' Index (PMI) in the UK arrived at 52.8 points in July, as compared to a previous 53.8 (revised down from 54.0) reading. Markets had predicted the PMI to tick down to 53.8.
Key Points:
Job creation slows to near-stagnation.
Business optimism dips to 22-month low.
Rob Dobson of Markit commented in the release, “The performance of the UK manufacturing sector looked increasingly lacklustre in August. The headline PMI fell to its lowest level for over two years, as growth of output and new orders slowed and the pace of job creation slumped to nearstagnation. Based on its historical relationship with official ONS data, the latest PMI report is broadly consistent with zero growth in manufacturing production, meaning the sector will likely fail to provide any support to the wider UK economy in the third quarter. “
“Although slower growth of domestic demand contributed to manufacturing’s weak performance, the main constraint was the trend in new export business. Foreign demand declined for the first time since April 2016, despite the weakness of sterling, amid reports of slower global economic growth and the increasingly uncertain trading environment. Inflows of new work from both domestic and overseas sources will need to strengthen if manufacturing is to show renewed vigour in the coming months.”
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