UK PMI falls to lowest level since early 2013

UK PMI falls to lowest level since early 2013 at start of third quarter, according to new figures released by Markit and CIPS in their latest survey.

Key findings of the Markit/CIPS report:
- UK Manufacturing PMI posts 48.2 in July, down from earlier flash estimate of 49.1

- Domestic market hit by pre- and post referendumun certainty

- Weaker sterling exchange rates aids new export order growth

Source: Markit and CIPS:-

"From CIPS The UK manufacturing sector started the third quarter on a weaker footing. Levels of production and incoming new orders both contracted, as the impact of increased business uncertainty on the domestic market offset an exchange rate supported increase in new export business.

At 48.2 in July, down from 52.4 in June, the seasonally adjusted Markit/CIPS Purchasing Managers’ Index® (PMI®) fell to its lowest level since February 2013. The reading was also below the earlier flash estimate of 49.1. This is only the second time since early-2013 that the PMI has fell to a sub-50.0 level.

The decline in production was the steepest since October 2012, with contractions across the consumer, intermediate and investment goods sectors. The intermediate goods sector saw the sharpest drops in both output and new orders.

Investment goods manufacturers also saw a moderate decrease in new work received during July, although this partly reflected some payback from June’s marked increase. There was, a modest increase in new orders to consumer goods producers, albeit at a substantially reduced pace of growth than in the prior survey month.

UK manufacturing employment decreased for the seventh straight month in July. Moreover, the rate of job loss was the second-sharpest for almost three-and-a-half years. Companies linked lower staffing levels to the contractions in output and new orders. There was also mention of natural wastage, restructuring, redundancies and outsourcing leading to job cuts.

Weaker inflows of new work and declining volumes of outstanding business also suggest that employment may fall further in coming months.

.....see the article at CIPS: Markit and CIPS