UK Final Manufacturing PMI arrives at 32.6 in April vs. 32.8 exp, Cable unfazed

The UK manufacturing sector activity contracted more-than-expected in the month of April, the final report from IHS Markit showed this Friday. 

The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) was revised down to 32.6 in April versus 32.8 expected and 32.9 – April’s first reading.

Key points              

Business sentiment remains close to record low.

Series-record lengthening of supplier lead times.

Rob Dobson, Director at IHS Markit, commented on the survey

“UK manufacturing suffered its worst month in recent history in April, as output, orders books and employment all fell at rates far surpassing anything seen in the PMI survey's 28-year history. Huge swathes of industry were hit hard by company closures, weak global demand, lockdowns and social distancing measures in response to COVID-19. The only pockets of growth were seen at firms making medical and food products.”

“Supply-chains also felt the full force of the outbreak as average supplier delays rose to the greatest extent seen since PMI records began. International goods flows were constrained by delays in air freight, shipping and border control issues, and staff shortages often limited production.”

FX implications

The GBP bears retain control following the downward revision to the UK Manufacturing PMI for April, as GBP/USD looks to extend the bounce from a daily low of 1.2534.

At the press time, Cable trades at 1.2560, still down -0.25%, as the focus now shifts towards the US ISM Manufacturing PMI for fresh dollar trades.