Indication of UK Manufacturing Slow Down?
February saw the rate of expansion in the UK manufacturing sector slow back towards the stagnation mark, according to latest PMI data from Markit/CIPS.
According to the latest data:- Output growth eased sharply, as levels of incoming new business showed littlemovement on one month earlier. The slowdown was also reflected in the labour market, with job losses registered for the second straight month. At 50.8 in February, down from 52.9 in January, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index posted its lowest reading since April 2013 – the first month of the current 35- month sequence of expansion. The growth rate of manufacturing production slumped to a seven-month low in February, led by sharp decelerations in the consumer and investment goods sectors. (Data collected 12-24 February)
Rob Dobson, Senior Economist at survey compilers Markit said: “The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England’s increasingly dovish stance. “The breadth of the slowdown is especially worrisome. The domestic market is showing signs of weakening while export business continued to fall. Price pressures also remained firmly on the downside, with the survey signalling input costs falling at a double-digit annual pace and average factory gate selling prices showing a further decline. A lot of this is driven by the ongoing weakness of global commodity prices. However, there are also signs that weaker growth is driving up competition between manufacturers to secure new business and among their suppliers too. “While these factors will help keep a lid on inflationary pressures, it is worth noting that the recent sharp drop in sterling came late in the survey collection window and so is not yet fully reflected in the results. Although sterling’s drop will hopefully boost exports, the likely increase in import costs in coming months will be unwelcome to manufacturers, especially given the imminent introduction of the new National Living Wage.”
To see the full article on the CIPS website... click here
According to the latest data:- Output growth eased sharply, as levels of incoming new business showed littlemovement on one month earlier. The slowdown was also reflected in the labour market, with job losses registered for the second straight month. At 50.8 in February, down from 52.9 in January, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index posted its lowest reading since April 2013 – the first month of the current 35- month sequence of expansion. The growth rate of manufacturing production slumped to a seven-month low in February, led by sharp decelerations in the consumer and investment goods sectors. (Data collected 12-24 February)
Rob Dobson, Senior Economist at survey compilers Markit said: “The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England’s increasingly dovish stance. “The breadth of the slowdown is especially worrisome. The domestic market is showing signs of weakening while export business continued to fall. Price pressures also remained firmly on the downside, with the survey signalling input costs falling at a double-digit annual pace and average factory gate selling prices showing a further decline. A lot of this is driven by the ongoing weakness of global commodity prices. However, there are also signs that weaker growth is driving up competition between manufacturers to secure new business and among their suppliers too. “While these factors will help keep a lid on inflationary pressures, it is worth noting that the recent sharp drop in sterling came late in the survey collection window and so is not yet fully reflected in the results. Although sterling’s drop will hopefully boost exports, the likely increase in import costs in coming months will be unwelcome to manufacturers, especially given the imminent introduction of the new National Living Wage.”
To see the full article on the CIPS website... click here